A stock dividend results in a decrease in
A)current liabilities.
B)profit.
C)share capital.
D)retained earnings.

Question

Quizplus · Accepted Answer

A stock dividend involves distributing additional shares of a company's stock to existing shareholders, which does not involve any outflow of cash or reduction in assets. Therefore, it does not affect current liabilities, profit or share capital. However, since more shares are being issued, the value of each individual share decreases, which reduces the retained earnings per share.

A Stock Dividend Results in a Decrease in