A small stock dividend:
A) increases the common stock account by the market price of each share issued.
B) reduces cash by the total market value of the issued shares.
C) affects the par value per share but not the equity account balances.
D) reduces retained earnings by the market price of each share issued.
E) does not affect the capital in excess of par value account.

Question

Quizplus · Accepted Answer

A small stock dividend reduces retained earnings by the market value of the shares issued, reflecting the distribution of value to shareholders without affecting cash or the par value per share.

A Small Stock Dividend