Unlike a stock split, a stock dividend requires a formal journal entry in the financial accounting records because stock dividends
A) increase the relative book value of an individual's stock holdings.
B) increase the stockholders' equity in the issuing firm.
C) are payable on the date they are declared.
D) represent a transfer from Retained Earnings to Capital Stock.

Question

Quizplus · Accepted Answer

Stock dividends require a formal journal entry because they involve transferring an amount from Retained Earnings to Capital Stock, reflecting the issuance of additional shares to shareholders.

Unlike a Stock Split, a Stock Dividend Requires a Formal