Match the Descriptions with the Type of Stock Transaction That

question 1

Multiple Choice

Match the descriptions with the type of stock transaction that displays the characteristic.Some letters will appear in more than one column and not all letters will necessarily be used.Some blanks will require more than one letter.

• A)To reduce market price of the stock
• B)To remind shareholders of their accumulating wealth.
• C)To signal to investors that the company's shares are worth buying.
• D)Reduces shareholders' equity.
• E)Changes par value per share.
• F)Changes liabilities.
• G)Reduces retained earnings.
• H)Does not require a journal entry.
• \(\begin{array}{cccl}
• &&\text { Small}&\text { Large }\\
• &\text { Stock }& \text { Stock } & \text { Stock } & \text { Cash } \\
• &\underline{\text { Split} }&\underline{\text { Dividend }} & \underline{\text { Dividend } }& \underline{\text { Dividend} }\\
• \text{Purpose:}&1.\underline{\quad\quad}&2.\underline{\quad\quad}&3.\underline{\quad\quad}&4.\underline{\quad\quad}\\
• \text{Effects:}&5.\underline{\quad\quad}&6.\underline{\quad\quad}&7.\underline{\quad\quad}&8.\underline{\quad\quad}
• \end{array}\)

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Definitions:

Time Value

The concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.