Which statement about "stock dividends" is correct?
A)Only a memo entry is needed for this transaction.
B)No entry is needed in the accounting records.
C)A journal entry is needed for this transaction.
D)This is the same as a stock split for accounting purposes.

Question

Quizplus · Accepted Answer

A journal entry is needed for stock dividends as it affects the retained earnings account. This is not the same as a stock split, which increases the number of shares outstanding but does not affect the company's retained earnings. A memo entry and no entry in accounting records are not correct statements as all transactions must be recorded in the accounting records.

Which Statement About "Stock Dividends" Is Correct