All the following except one are true statements about the declaration and distribution of stock dividends.
A)Stock dividends reduce the assets of the firm.
B)Stock dividends do not increase or decrease liabilities
C)Stock dividends increase contributed capital
D)Stock dividends decrease retained earnings.

Question

Quizplus · Accepted Answer

Stock dividends do not reduce the assets of the firm as they are essentially a transfer of some of the retained earnings to the contributed capital account. Therefore, all other statements (B, C, and D) are true.

All the Following Except One Are True Statements About the Declaration