Undistributed Stock Dividends Should Be Reported as

question 64

Multiple Choice

Undistributed stock dividends should be reported as

• A) a current liability.
• B) an addition to capital stock outstanding.
• C) a reduction in total stockholders' equity.
• D) a note to the financial statements.

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders based on a specific activity base, such as labor hours or machine hours.

Machine-Hours

A measure of the amount of time a machine is operated within a given period.

Direct Labor-Hours

The total hours worked by employees who are directly involved in the production process.

Predetermined Overhead Rate

A rate calculated before a period begins, used to allocate estimated overhead costs to products based on a predetermined activity base.