A Corporation Should Account for the Declaration of a 10

question 97

Multiple Choice

A corporation should account for the declaration of a 10 percent stock dividend by

• A)transferring from retained earnings to contributed capital an amount equal to the legal capital represented by the dividend shares.
• B)transferring from retained earnings to contributed capital an amount equal to the market value of the dividend shares.
• C)transferring from retained earnings to contributed capital whatever amount the board of directors deems appropriate.
• D)making only a memorandum entry in the general journal.

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Definitions:

Asch's Studies

A series of experiments conducted by Solomon Asch that demonstrated the impact of group pressure on conformity.

Conformity

The act of matching attitudes, beliefs, and behaviors to group norms, policies, or societal expectations.

Objective Right

A principle or standard of behavior that is universally accepted as correct or moral, independent of individual thought or opinion.

Ambiguity

The quality of being open to more than one interpretation; inexactness.