What Is the Effect of a Stock Dividend on the Balance

question 75

Multiple Choice

What is the effect of a stock dividend on the balance sheet?

• A)Decrease total assets and decrease total stockholders' equity
• B)Decrease total assets and increase total stockholders' equity
• C)Increase total liabilities and decrease total stockholders' equity
• D)No effect on total assets,total liabilities,or total stockholders' equity

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Definitions:

Additional Labor

Employees or work hours added beyond the initial planning or standard staffing levels, often to meet increased production demands or to cover for unexpected labor shortages.

Variable Cost Concept

A cost that varies with the level of output or activity, in contrast to fixed costs, which remain constant regardless of activity.

Variable Manufacturing Costs

Costs that vary directly with the level of production, including materials, labor, and overhead expenses that fluctuate with output volume.

Selling and Administrative Costs

Expenses related to the selling of products and the management of the company, not directly tied to the production process.