Which of the Following Occurs When a Stock Is Split

question 24

Multiple Choice

Which of the following occurs when a stock is split two-for-one?

• A) the price of the stock doubles
• B) the firm's assets increase
• C) the firm's liabilities decrease
• D) the par value of the stock is reduced

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Definitions:

Journal Entry

A record in the accounting journals that reflects the debit and credit effects of a financial transaction in the double-entry bookkeeping system.

Transaction Date

The specific date on which a financial transaction occurs, significant for recording and reporting purposes.

Account Balances

The amounts of money held in financial accounts, calculated as the funds deposited minus funds withdrawn, plus any interest or capital gains.