A Corporation May Issue a Stock Dividend for Which of the Following

question 36

Multiple Choice

A corporation may issue a stock dividend for which of the following reasons?

• A)May want to decrease permanent capital in the business
• B)May want to increase market value
• C)May be short of cash and unable to pay a cash dividend
• D)None of the above are correct.

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Definitions:

Work in Process

Items that are in the middle stages of production, neither raw materials nor finished goods, reflecting the cost of ongoing manufacturing activities.

Property, Plant, and Equipment

Long-term assets owned by a business for use in production, manufacturing, or administrative functions, not intended for sale.

Standard Cost System

This system assigns predetermined costs to the manufacture of products and services, used for budgeting and controlling expenses.

Fixed Manufacturing Overhead Rate

A constant charge that represents the total fixed manufacturing overhead costs divided by the standard allocation base.