Which of the Following Is a TRUE Statement Regarding the Effect

question 125

Multiple Choice

Which of the following is a TRUE statement regarding the effect of a stock split and stock dividend on total assets or liabilities?

• A) Both a stock split and a stock dividend will decrease total assets.
• B) Both a stock split and a stock dividend will increase total liabilities.
• C) A stock split will increase total assets, but a stock dividend will not.
• D) Neither a stock split nor a stock dividend will affect total assets or total liabilities.

---

Definitions:

End of the Year

Typically refers to the close of the fiscal or calendar year, a key time for financial reporting and assessment for businesses.

Depreciation Expense

The allocation of the cost of a tangible asset over its service life, representing how much of an asset's value has been used up over time.

Accounts Receivable

Unpaid amounts from customers for goods or services that a business has already provided.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from total revenue.