What Is the Effect of Declaring a Stock Dividend on the Liabilities

question 68

Multiple Choice

What is the effect of declaring a stock dividend on the liabilities and stockholders' equity section of the balance sheet?

• A) A decrease in total liabilities and an increase in total stockholders' equity
• B) No effect on total liabilities and total stockholders' equity
• C) An increase in total liabilities and a decrease in total stockholders' equity
• D) No effect on total liabilities and a decrease in total stockholders' equity

---

Definitions:

Colonialism

Refers to the control of developing societies by more developed, powerful societies.

Homogenization

A process by which differences among elements are minimized, making them uniform or similar, often used in contexts such as culture, milk processing, and societal integration.

Regionalization

The division of an area into smaller regions or the tendency of countries to form regional alliances for economic, social, or political purposes.

Modernization Theory

A theory suggesting that as societies develop, they will follow a similar path of development to those of more developed countries, emphasizing the role of technology and economic growth.