Which dividends do not reduce stockholders' equity?

Question

Quizplus · Accepted Answer

Stock dividends do not reduce stockholders' equity because they involve a transfer of funds within the equity section of the balance sheet. Specifically, retained earnings (an equity account) is decreased, while the common stock and paid-in capital accounts are increased by the same amount. Cash, property, and liquidating dividends, on the other hand, reduce stockholders' equity because they involve a transfer of assets from the company to the shareholders.

Which Dividends Do Not Reduce Stockholders' Equity