Declaring and distributing stock dividends:
A)increases retained earnings.
B)increases the total liabilities of the corporation and decreases the total stockholders' equity.
C)reduces the total assets of the corporation.
D)has no effect on total stockholders' equity.

Question

Quizplus · Accepted Answer

Declaring and distributing stock dividends does not change the total amount of stockholders' equity, as the stock dividend merely transfers a portion of retained earnings to the common stock account. Therefore, it does not affect liabilities or assets either.

Declaring and Distributing Stock Dividends