How would retained earnings be affected by the declaration of each of the following? Stock Dividend Stock Split
A) Decrease Decrease
B) No effect Decrease
C) Decrease No effect
D) No effect No effect

Question

Quizplus · Accepted Answer

A stock dividend decreases retained earnings because it is a distribution of earnings to shareholders, while a stock split does not affect retained earnings as it only increases the number of shares without changing the total equity.

How Would Retained Earnings Be Affected by the Declaration of Each