A Stock Dividend Results in an Increase in Paid-In Capital

question 156

True/False

A stock dividend results in an increase in paid-in capital in the accounts.

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Definitions:

Capital Budgeting

The process of making investment decisions in long-term assets and projects, often involving analysis of their cash flows.

Straight-Line Depreciation

A method for dispersing the expense of a physical asset over its viable life in regular yearly sums.

Cash Flow

The total amount of money being transferred into and out of a business, particularly in terms of liquidity and financial stability.

Capital Budgeting

The process businesses use to evaluate and select long-term investments, such as new machinery, replacement machinery, new plants, new products, and research development projects.