How will the declaration and distribution of a 10 percent stock dividend affect the issuing corporation's balance of retained earnings and total stockholders' equity,respectively?
A)Decrease and no effect
B)No effect and no effect
C)Decrease and decrease
D)No effect and decrease

Question

Quizplus · Accepted Answer

A stock dividend involves transferring amounts from retained earnings to paid-in capital, thus decreasing retained earnings but not affecting the total stockholders' equity.

How Will the Declaration and Distribution of a 10 Percent