Stock Splits and Stock Dividends Have the Following Effects on Retained

question 46

Multiple Choice

Stock splits and stock dividends have the following effects on retained earnings:

• A)Stock splits increase retained earnings,while stock dividends have no impact.
• B)Stock dividends decrease retained earnings,while stock splits have no impact.
• C)Stock splits and stock dividends both lead to a decrease in retained earnings
• D)Stock splits and stock dividends have no impact on retained earnings.

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Definitions:

Cost Of Goods Sold

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

Merchandise Purchases

The acquisition of goods that a company intends to resell to customers.

Fixed Product Cost

Costs that do not vary with the level of production or sales, such as salaries of permanent employees and rent.

Factory Supervisor

An individual who oversees the work of employees in a manufacturing facility, ensuring that production goals and standards are met.