A Subsidiary Split Its Stock 2 for 1

question 19

Multiple Choice

A subsidiary split its stock 2 for 1.Which of the following statements is false?

• A)A stock split does not affect the amount of net assets of the subsidiary.
• B)A stock split does not affect parent and noncontrolling interest ownership percentages.
• C)A stock split does not affect consolidation procedures.
• D)A 2 for 1 stock split decreases the number of shares outstanding.

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Definitions:

Operating Cash Flow

A financial metric that represents the cash generated by a company's regular business operations in a specific time frame.

Comprehensive Income

Represents the total change in equity for a business enterprise during a period from transactions and other events and circumstances from non-owner sources. It includes all non-owner changes in equity, not just the net income.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life for accounting and tax purposes.

Net Working Capital

The gap between what a company owns in the short term (current assets) and what it owes (current liabilities), revealing its financial stability in the near term.