When a Corporation Issues a Stock Dividend, Which of the Following

question 83

Multiple Choice

When a corporation issues a stock dividend, which of the following is true?

• A)Cash decreases.
• B)Total stockholders' equity remains the same.
• C)Total stockholders' equity decreases.
• D)Retained earnings is increased.

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Definitions:

Exculpatory Clause

A part of a contractual agreement that releases one party from liability for wrongful actions or damages.

Minor

A person under the legal age of adulthood, which varies by jurisdiction but is commonly 18 years old.

Contract Disaffirmance

The act of rejecting or declaring a contract void, often used in cases where one of the parties was incapacitated or a minor at the time of agreement.

Affirmed

A legal term used when a higher court has confirmed or upheld the decision of a lower court.