The Issuance of a Stock Dividend Will

question 19

Multiple Choice

The issuance of a stock dividend will

• A)decrease total assets.
• B)increase retained earnings.
• C)decrease paid-in capital.
• D)not affect total equity.

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Definitions:

Residual Value

The estimated value an asset will realize upon the conclusion of its useful life, considered in depreciation calculations.

Operating Lease Method

An accounting method for leasing whereby the lease payments are treated as an operational expense, without recording the asset and liability on the balance sheet.

Straight-Line Depreciation

An approach that spreads the expense of a physical asset across its productive lifespan in consistent yearly increments.

Capital Lease

A lease classified as a purchase by the lessee for accounting purposes, as it transfers substantially all risks and benefits of ownership.