A Stock Dividend

question 121

Multiple Choice

A stock dividend:

• A)is the same thing as a stock split.
• B)will reduce shareholders' equity just like a cash dividend.
• C)will not change any of the accounts within shareholders' equity.
• D)will reduce retained earnings just like a cash dividend.

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Definitions:

Depreciation Expense

The portion of the total cost of a depreciable asset that is allocated as an expense to the income statement in a given period.

Residual Value

The estimated value of a leased asset at the end of the lease term, or the expected value of an asset after its useful life ends.

Depreciation Rate

The percentage or method used to calculate the decrease in value of an asset over time due to use, wear and tear, or obsolescence.

FIFO Approach

A method of inventory valuation where the first items put into inventory are the first ones to be recorded as sold.