The Receipt of a Stock Dividend

question 16

Multiple Choice

The receipt of a stock dividend:

• A)increases assets and increases retained earnings.
• B)increases assets and decreases stockholders' equity.
• C)increases assets and increases paid- in- capital.
• D)has no effect on assets or total equity.

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Definitions:

Business Owner

An individual who owns and operates a business entity, assuming all risks and rewards of the venture.

Half-year Rule

A tax regulation allowing businesses to claim half-year depreciation for assets acquired or disposed of during a fiscal year.

Firms

Business organizations or entities engaged in commercial, industrial, or professional activities, either for profit or non-profit.

Interest Expense

The cost incurred by an entity for borrowed funds, often expressed as a yearly rate.