When Stock Dividends Are Distributed

question 8

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 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:

Manufacturing Overhead

All indirect costs associated with the production process, such as salaries of supervisors and maintenance costs.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected variable overhead based on standard cost accounting practices.

Direct Labor-Hours

The combined hours worked by staff directly partaking in the manufacturing activities.

Standard Hours Allowed

The amount of work hours allocated for the completion of a specific task, based on standard performance.