Asked by Katie Flynn on May 04, 2024
Verified
A stock dividend results in a decrease in
A) current liabilities.
B) net income.
C) share capital.
D) retained earnings.
Retained Earnings
Profits that a company has earned to date, less any dividends or other distributions paid to shareholders, often reinvested back into the company.
Share Capital
The funds raised by a company through the issuance of shares, representing the ownership of the company.
- Apprehend the implications of stock and cash dividends on the equity held by shareholders and total assets.
Verified Answer
DP
Doan Phi HoangMay 08, 2024
Final Answer :
D
Explanation :
Stock dividends result in a decrease in retained earnings because the value of the dividends is transferred out of retained earnings and into share capital.
Learning Objectives
- Apprehend the implications of stock and cash dividends on the equity held by shareholders and total assets.