When a Corporation Completes a 3-For-1 Stock Split

question 22

Multiple Choice

When a corporation completes a 3-for-1 stock split

• A) the ownership interest of current stockholders is decreased
• B) the market price per share of the stock is decreased
• C) the par value per share is decreased
• D) b and c

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Definitions:

Storeroom

A room or space where supplies, materials, or equipment are kept for future use.

Credit

An accounting entry that either increases a liability or equity account, or decreases an asset or expense account. It is positioned on the right side of an accounting ledger.

Predetermined Overhead Rate

A rate calculated before a period begins, used to apply manufacturing overhead costs to products based on a relevant activity, such as machine hours or labor hours.

Underapplied

Describes a situation where the allocated overhead costs in accounting are less than the actual overhead costs incurred.