The Declaration of a Stock Dividend Decreases a Corporation's Stockholders

question 18

True/False

The declaration of a stock dividend decreases a corporation's stockholders' equity and decreases its liabilities.

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Definitions:

Depreciable Cost

The cost of a tangible asset minus its estimated salvage value, over which depreciation is calculated.

Depreciation Expense

An accounting method allocating the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.

Expected Useful Life

The estimated length of time a fixed asset will be used in normal operations.

Placed in Service

Refers to the point in time when an asset begins to be used by a business for its intended purpose, marking the start of depreciation.