Which of the Following Is True of the Distribution of Stock

question 77

Multiple Choice

Which of the following is true of the distribution of stock dividends?

• A)It decreases both assets and liabilities.
• B)It decreases assets and increase liabilities.
• C)It affects only stockholder's equity accounts.
• D)It increases both dividends payable and cash.

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Definitions:

Errand Runner

A person or service engaged to perform small tasks or deliveries.

Implied Authority

A form of authority of an agent that is not explicitly stated but is assumed to be granted as part of the agent's duties.

Winding Up

The process of closing down a company by settling its liabilities and distributing any remaining assets to its shareholders.

Converting Assets

The process of changing assets from one form to another, often from non-liquid assets into cash or cash equivalents.