What Effect Will the Declaration and Distribution of a Stock $\begin{array}{cc}\text { Net Income } & \text { Cash Flows } \\\end{array}$

question 135

Multiple Choice

What effect will the declaration and distribution of a stock dividend have on net income and cash flows? $\begin{array}{cc}\text { Net Income } & \text { Cash Flows } \\\end{array}$

A. $\begin{array}{cc}\text { Not affected } & \text { Not affectec } \\\end{array}$

B. $\begin{array}{cc}\text { Not affected } & \text { Decrease }\end{array}$

C. $\begin{array}{cc}\text { Increase} &&& \text { Decrease }\end{array}$

D. $\begin{array}{cc}\text { Decrease} &&& \text { Decrease }\end{array}$

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice D

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Definitions:

Financial Transactions

The process of exchanging one asset for another, typically involving the transfer of money between parties in the business or financial context.

Financial Statements

Official records that outline the financial activities and condition of a business, including the balance sheet, income statement, and cash flow statement.

Government Accountant

A financial expert who works within the public sector, managing and auditing the accounts of government agencies and ensuring compliance with legal requirements.

Public Funds

Resources collected by government bodies through taxation, fees, fines, and other means, intended for public use and expenditure.