The accounting treatment for a stock split is different from a stock dividend in that there is no transfer of funds from retained earnings to the capital accounts, but merely a reduction in par value and a proportionate increase in the number of outstanding shares.

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In a stock split, there is no transfer of funds from retained earnings to capital accounts, and the par value of the shares is reduced while the number of outstanding shares is increased. This is different from a stock dividend, where there is a transfer of funds from retained earnings to capital accounts, and additional shares are issued as a dividend to shareholders.

The Accounting Treatment for a Stock Split Is Different from a Stock