Which of the following accounts is used to record a small stock dividend on common stock but is not used to record a large stock dividend on common stock?
A)Retained Earnings
B)Common Stock
C)Additional Paid-In Capital
D)Cash

Question

Quizplus · Accepted Answer

Retained Earnings and Common Stock are used for both small and large stock dividends,which do not include any cash.Because a small stock dividend is recorded at market value,Additional Paid-In Capital is used for a small stock dividend (for the excess of the market value over the par value of the stock issued).Large stock dividends are recorded at the par value of the stock issued,so there is no need to use the Additional Paid-In Capital account.

Which of the Following Accounts Is Used to Record a Small