When Stock Dividends Are Distributed

question 171

Multiple Choice

When stock dividends are distributed,

• A) Common Stock Dividends Distributable is decreased.
• B) retained earnings is decreased.
• C) Paid-in Capital in Excess of Par Value is debited if it is a small stock dividend.
• D) no entry is necessary if it is a large stock dividend.

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Definitions:

Enforceable Contract

An enforceable contract is a legally valid agreement between two or more parties, which can be upheld and compelled by the courts.

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Oral Contract

An agreement between parties that is made verbally and is as legally binding as a written contract, though harder to prove.