Small Stock Dividends Are Recorded by Debiting Retained Earnings for the Par

question 59

True/False

Small stock dividends are recorded by debiting Retained Earnings for the par value per share.Small stock dividends are recorded by debiting Retained Earnings for the market value,rather than the par value,per share.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, often expressed as an annual percentage of the principal.

Depreciable Asset

An asset that loses value over time due to wear and tear, and for which depreciation can be applied in accounting to spread its cost over its useful life.

Tax Consequence

The financial effects that taxes have on various financial decisions, affecting net investment income or costs.

Marginal Tax Rate

Marginal Tax Rate is the rate at which the last dollar of income is taxed, reflecting the percentage of tax applied to your next dollar of income.