A stock dividend is considered a large stock dividend if it is ________ than 25% of the outstanding shares,and it is recorded at the ________ value of the additional shares.
A)more;par
B)less;par
C)more;market
D)less;market

Question

Quizplus · Accepted Answer

The value used to record a stock dividend varies depending on the size of the stock dividend.A large stock dividend (more than 25% of the company's outstanding stock)is recorded at par value;thus,the decrease in Retained Earnings equals the increase in the Common Stock account.A small stock dividend (less than 25% of the company's outstanding stock)is recorded at market value.

A Stock Dividend Is Considered a Large Stock Dividend If