Supervox Corporation Declared a 3-For-2 Common Stock Split,but This Transaction

question 85

Multiple Choice

Supervox Corporation declared a 3-for-2 common stock split,but this transaction was erroneously recorded as a 50% common stock dividend.As a result:

• A)Retained earnings is understated.
• B)The total dollar amount of stockholders' equity is overstated.
• C)The corporate records do not show the correct number of shares of common stock outstanding.
• D)The common stock account is understated.

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Definitions:

Quantity Supplied

The overall quantity of a particular product or service that vendors are willing and prepared to trade at an agreed price during a defined time period.

Supply Increase

A situation in economics where the quantity of goods or services offered by businesses grows, typically leading to lower prices if demand remains constant.

Supply Decrease

A reduction in the overall amount of goods and services that producers are willing and able to offer at a given price level.

Demand Increase

A rise in the quantity of a product or service that consumers are willing and able to purchase at various prices.