Declaring and Distributing Stock Dividends

question 70

Multiple Choice

Declaring and distributing stock dividends:

• A)increases retained earnings.
• B)increases the total liabilities of the corporation and decreases the total stockholders' equity.
• C)reduces the total assets of the corporation.
• D)has no effect on total stockholders' equity.

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Definitions:

Unadjusted Trial Balance

A financial report that shows the balances of all accounts, including assets, liabilities, equity, income, and expenses before any adjustments are made for the accounting period.

Bad Debts Expense

An expense reported on the income statement reflecting the cost of accounts receivable that a company does not expect to collect.

Factoring Fee Expense

A cost incurred by a business when it sells its accounts receivable to a third party (the factor) at a discount.

Accounts Receivable

Funds that clients or customers owe to a company for products or services that have been provided but not yet compensated for.