Qdot International Originally Issued Common Stock at a Price of $20

question 23

True/False

Qdot International originally issued common stock at a price of $20 per share. A year later, they distributed a 10% stock dividend to shareholders. At the time of the stock dividend, the share price had gone up to $24 per share. Under the rules of GAAP for stock dividends, Qdot will record neither a gain nor a loss on the stock dividend, despite the fact that the share price went up.

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Definitions:

Inflation

Inflation is the rate at which the general level of prices for goods and services is rising, eroding purchasing power over time.

Unemployment

The situation when individuals who are capable of working and are actively seeking work but are unable to find employment.

Short Run

A period during which at least one factor of production is considered fixed, typically used to describe a timeframe in which firms cannot alter plant capacity.

Money Supply Growth

An increase in the total amount of money in circulation or in the economy, often indicated by measures such as M1, M2, and M3.