Which of the following is true with regard to a stock dividend?
A) It results in a transfer of retained earnings to contributed capital.
B) It does not require a journal entry.
C) It is accounted for in exactly the same manner as a stock split.
D) It increases the number of shares outstanding and involves a pro rata reduction in the par value per share.

Question

Quizplus · Accepted Answer

A stock dividend involves transferring an amount from retained earnings to contributed capital, reflecting the distribution of additional shares to shareholders.

Which of the Following Is True with Regard to a Stock