Which of the Following Statements Concerning Stock Dividends Is Correct

question 126

Multiple Choice

Which of the following statements concerning stock dividends is correct?

• A)A stock dividend cannot use treasury stock.
• B)The issuance of a stock dividend increases total stockholders' equity.
• C)The declaration of a stock dividend should not be recorded as a liability even though it has not yet been issued.
• D)Courts generally have held that stock dividends, once declared, are irrevocable by the board of directors; therefore, a stock dividend declared, but not yet issued is a liability.

---

Definitions:

Readability

The ease with which a reader can understand written text.

Large Fonts

The use of oversized text in written material to attract attention, emphasize key points, or aid in readability for the visually impaired.

Inverted Pyramid

A style of writing often used in journalism that presents the most important information at the beginning, followed by supporting details.

AIDA Model

A marketing framework that outlines the process for achieving successful advertising and sales experiences, standing for Attention, Interest, Desire, and Action.