Which of the Following Statements Regarding Stock Dividends and Stock

question 42

Multiple Choice

Which of the following statements regarding stock dividends and stock splits is true:

• A)a two-for-one stock split is equivalent to a 50% stock dividend.
• B)a three-for-one stock split is equivalent to a 66% stock dividend.
• C)a three-for-two stock split is equivalent to a 100% stock dividend.
• D)a 50% stock dividend is equivalent to a three-for-two stock split.

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Definitions:

Income Summary

A temporary account used in accounting to summarize all income and expenses for a period, closing the books and preparing them for the next period.

Beginning Inventories

The value of goods available for sale at the start of an accounting period, carried over from the end of the previous period.

Ending Inventories

The worth of merchandise ready for purchase at the conclusion of a financial period.

Interest Expense

Costs incurred by a borrower for the use of borrowed money, typically paid as a rate on loans or debt.