When a Share Dividend Is Declared on the Ordinary Shares

question 13

True/False

When a share dividend is declared on the ordinary shares outstanding, a company is required to transfer the par value of the shares issued from retained earnings.

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Definitions:

Income Recognition

The accounting principle that determines the specific conditions under which income becomes recognized as revenue on the financial statements.

Put Option

A financial derivative that gives the holder the right but not the obligation to sell a specified amount of an underlying asset at a predetermined price within a specified time frame.

Foreign Currency

Monetary units issued by countries other than the home country of a business or investor, involved in international transactions.

Right to Sell

The legal permission or authority given to a person or entity to sell a product or service.