The distribution of a stock dividend ________.
A) decreases both assets and liabilities
B) decreases assets and increase liabilities
C) effects only stockholder's equity accounts
D) increases both dividends payable and cash

Question

Quizplus · Accepted Answer

A stock dividend only affects the stockholder's equity accounts of a company, as it involves distributing additional shares of stock to current shareholders. It does not affect assets or liabilities, or create a payment of cash, so choices A, B, and D are all incorrect.

The Distribution of a Stock Dividend ________