The Effect of a Stock Dividend Is to

question 139

Multiple Choice

The effect of a stock dividend is to

• A) decrease total assets and stockholders' equity.
• B) change the composition of stockholders' equity.
• C) decrease total assets and total liabilities.
• D) increase the book value per share of common stock.

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Definitions:

Single-Owner

Pertains to a business that is exclusively owned by one individual who is responsible for its operations and liabilities.

Business Organization

An entity formed for the purpose of carrying out commercial enterprise, including options such as sole proprietorships, partnerships, and corporations.

Partnership

A legal form of business operation where two or more individuals share ownership, as well as the responsibility for managing the business and the sharing of its profits and losses.

Personal Income Tax

A tax levied on an individual's income, including wages, salaries, and other earnings, by the government.