Which of the Following Statements About a 2-For-1 Stock Split

question 54

Multiple Choice

Which of the following statements about a 2-for-1 stock split is not true?

• A)The market value of the shares will probably decrease.
• B)A shareholder with 200 shares before the split owns 400 shares after the split.
• C)Legal capital per share is reduced to half of what it was before the split.
• D)Total share capital increases.

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Definitions:

Normal Costing System

An accounting method that assigns indirect costs based on a predetermined rate and direct costs based on actual values.

Actual Overhead Costs

The real expenses incurred for indirect materials, labor, and other costs that are not directly tied to the production of goods or services.

Predetermined Overhead Rate

The predetermined overhead rate is calculated by dividing estimated total overhead costs by an estimated allocation base, used to allocate overhead to products or job orders.

Direct Labour-Hours

A measure of the labor time worked directly on specific jobs or products.