How Do Stock Splits and Stock Dividends Impact Retained Earnings

question 1

Multiple Choice

How do stock splits and stock dividends impact Retained Earnings?

• A)Stock splits increase Retained Earnings and stock dividends have no effect on Retained Earnings.
• B)Stock splits have no effect on Retained Earnings and stock dividends decrease Retained Earnings.
• C)Stock splits and stock dividends both decrease Retained Earnings.
• D)Stock splits and stock dividends have no effect on Retained Earnings.

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Definitions:

Purchase Obligation

A commitment to buy goods or services under specified conditions, often including future dates and quantities.

Adjusting Journal Entries

Entries made in the accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Contingent Loss

A potential financial loss that may occur in the future depending on the outcome of a specific event, often recognized in financial statements once the loss is deemed probable and the amount can be reasonably estimated.

Cancellable

The property of being able to be cancelled or terminated, often referring to contracts, policies, or agreements that can be ended before the agreed-upon term.