Rienstra Electronics has just declared a 2 for 1 stock split. The current price of the stock is above the par value. Which of the following account balances will be affected by the stock split?

Question

Quizplus · Accepted Answer

A stock split does not affect the balance sheet accounts directly. It increases the number of shares outstanding and decreases the price per share accordingly, but the total value of shares remains the same. Therefore, accounts like Common Stock, Paid in Excess, and Retained Earnings are not impacted by the split itself.

Rienstra Electronics Has Just Declared a 2 for 1 Stock