The declaration and issuance of a stock dividend larger than 25% generally
A)increases common shares outstanding and increases total shareholders' equity.
B)increases retained earnings and increases total shareholders' equity.
C)may increase or decrease common shares but does not change total shareholders'
Equity.
D)decreases retained earnings but does not change total shareholders' equity.

Question

Quizplus · Accepted Answer

A stock dividend larger than 25% decreases retained earnings but does not change total shareholders' equity, as it is a reclassification within equity.

The Declaration and Issuance of a Stock Dividend Larger Than