Which of the Following Is True

question 18

Multiple Choice

Which of the following is true?

• A)The declaration of a stock dividend gives rise to a liability.
• B)Stock dividends are revocable by the board of directors at any time before they are issued.
• C)Undeclared dividends in arrears on cumulative preferred shares are recorded as a liability.
• D)No note disclosure is required for the declaration of a stock split.

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Definitions:

Par Value

The nominal or face value of a bond, stock, or other financial instrument, established at the time of issuance.

Semiannually

Occurring twice a year, often referring to payments or interest calculations.

Cash Paid

The total amount of cash disbursed by a company for various purposes, such as operating expenses, purchasing assets, or debt repayment.

Premium on Bonds Payable

The amount by which the cash received from issuing bonds exceeds their face value, signifying an interest rate lower than the market rate.