A stock split
A) is treated by accountants just like a stock dividend.
B) reduces the retained earnings account.
C) does not change the total dollar amount in the common stock account.
D) increases corporate wealth.

Question

Quizplus · Accepted Answer

A stock split does not change the total dollar amount in the common stock account. Instead, it increases the number of shares outstanding and reduces the market price per share, without affecting the overall value of the company. Stock splits do not have an impact on retained earnings or corporate wealth. Therefore, choices A, B, and D are incorrect.

A Stock Split