Declaration and Distribution of Stock Dividends

question 40

Multiple Choice

Declaration and distribution of stock dividends:

• A)increases the total liabilities of the corporation and decreases the total stockholders' equity.
• B)increases the stock account and decreases retained earnings.
• C)reduces the total liabilities of the corporation.
• D)reduces the total assets of the corporation.

---

Definitions:

Cost of Goods Sold

Calculates the direct costs attributable to the production of the goods sold by a company, including materials and labor.

Extraordinary Items

Events and transactions that are distinguished by their unusual nature and by the infrequency of their occurrence, no longer classified separately in financial statements as of recent accounting standards.

Financial Statements

Reports that provide an overview of a company's financial condition, including balance sheet, income statement, and cash flow statement.

Extraordinary Gains

Unusual and infrequent gains that are reported separately from regular income because they result from events that are not part of the company's usual business activities.