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.

---

Definitions:

Multiplier

An economic factor that quantifies the impact of a change in investment, government spending, or other financial activity on the overall economy.

Marginal Propensity

Refers to the increase in personal consumer spending that occurs with an increase in disposable income.

Aggregate Expenditure

The total amount spent on goods and services in an economy at a given level of income during a specific period.

Marginal Propensity

The ratio of the change in consumption or saving to the change in income, indicating how income changes affect spending or saving behaviors.