Which of the Following Statements Regarding Stock Splits Is INCORRECT

question 70

Multiple Choice

Which of the following statements regarding stock splits is INCORRECT?

• A)A stock split is an increase in the number of authorized, issued and outstanding shares of stock.
• B)A stock split decreases the market price of the stock.
• C)A stock split involves a reduction in the stock's par value.
• D)A stock split increases total owners' equity.

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Definitions:

Raw Material

Basic substances in their natural, modified, or semi-processed state, used as inputs for a production process to create goods or services.

Work in Process

This refers to the inventory of items being produced but not yet completed, often seen in various stages of production.

Property, Plant, and Equipment

Long-term tangible assets used in the operation of a business and not intended for resale, including buildings, machinery, and equipment.

Fixed Manufacturing Overhead

Costs associated with production that do not change with the level of output, such as rent, salaries, and utilities.