The Declaration and Issuance of a Stock Dividend Larger Than

question 38

Multiple Choice

The declaration and issuance of a stock dividend larger than 25% generally

• A) increases common shares outstanding and increases total shareholders' equity.
• B) increases retained earnings and increases total shareholders' equity.
• C) may increase or decrease common shares but does not change total shareholders' equity.
• D) decreases retained earnings but does not change total shareholders' equity.

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Definitions:

Manual Accounting System

A system in which someone performs each of the steps in the accounting cycle by hand.

Special Journals

Accounting books designed for recording specific types of transactions, such as sales, purchases, cash receipts, and cash disbursements.

Special Journals

Accounting journals designed for recording a specific type of transaction consistently, such as sales or purchases, for efficient processing.

General Journal

The primary accounting record where all financial transactions of a business are initially recorded before summarizing.