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

question 76

True/False

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

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Definitions:

Current Liabilities

Obligations or debts due for payment within one year.

Current Ratio

A financial ratio indicating how well a company can settle short-term debts with its available assets.

Total Assets

The total of all properties a company owns, encompassing both short-term and long-term assets.

Liquidity

The ability of an asset to be converted into cash quickly without significantly affecting its price.