Which of the Following Is NOT True of Stock Dividends

question 116

Multiple Choice

Which of the following is NOT true of stock dividends?

• A) Stock dividends have no effect on assets or liabilities.
• B) Stock dividends increase dividends payable and reduce cash.
• C) Stock dividends affect only stockholder's equity accounts.
• D) Stock dividends have no effect on total stockholders' equity.

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Definitions:

Currency Requirement

The necessity for a form of payment to be accepted as valid currency within a financial transaction.

Negotiability

The ability of a financial instrument to be transferred from one party to another with the title passing legally to the transferee.

United States

A federal republic consisting of fifty states, a federal district, and various territories, characterized by its democratic government and diverse population.

Comparative Negligence

A principle of tort law that compares the fault of each party involved in an accident and allocates the damages accordingly.