A small stock dividend:
A)Results in a transfer of retained earnings to common stock and additional paid-in capital.
B)Increases the number of shares outstanding and involves a pro rata reduction in the par value per share.
C)Is accounted for in exactly the same manner as a stock split.
D)Results in a transfer of retained earnings to additional paid-in capital and also increases the number of shares outstanding and involves a pro rata reduction in the par value per share.

Question

Quizplus · Accepted Answer

A small stock dividend results in a transfer of retained earnings to common stock and additional paid-in capital, reflecting the distribution of additional shares to shareholders without changing the par value per share.

A Small Stock Dividend