If a subsidiary issues a stock dividend, which of the following statements is true?
A) Investment in subsidiary on the parent's books will increase.
B) Investment in subsidiary on the parent's books will decrease.
C) Additional paid-in capital on the parent's books will increase.
D) Additional paid-in capital on the parent's books will decrease.
E) No adjustment is necessary.

Question

Quizplus · Accepted Answer

A stock dividend by a subsidiary does not affect the parent's investment account or additional paid-in capital; it only changes the composition of the subsidiary's equity.

If a Subsidiary Issues a Stock Dividend, Which of the Following