Which one of the following is a result of a small stock dividend?
A) Increase in the retained earnings account balance
B) Decrease in total owner's equity
C) Decrease in cash
D) Decrease in capital in excess of par value
E) Increase in the common stock account balance

Question

Quizplus · Accepted Answer

A small stock dividend increases the number of shares outstanding, but the total value of the shares remains the same. As a result, the common stock account balance increases to reflect the additional shares issued. The retained earnings account balance and capital in excess of par value do not change as a result of a small stock dividend. Additionally, there is no decrease in cash because no cash is involved in the transaction. Therefore, option E is the correct answer.

Which One of the Following Is a Result of a Small