A stock dividend:
A) Results in a transfer of retained earnings to capital in excess of par.
B) Increases the number of shares outstanding and involves a pro rata reduction in the par value per share.
C)Is accounted for in exactly the same manner as a stock split.
D)Results in a transfer of retained earnings to capital in excess of par and also increases the number of shares outstanding and involves a pro rata reduction in the par value per share.

Question

Quizplus · Accepted Answer

A stock dividend results in a transfer of retained earnings to capital stock accounts, but it does not involve a reduction in par value per share or account for it like a stock split.

A Stock Dividend