A stock dividend requires a journal entry when issued, but a stock split does not require a journal entry.

Question

Quizplus · Accepted Answer

A stock dividend involves the distribution of additional shares to shareholders, which affects the equity section of the balance sheet and requires a journal entry to record the transaction. In contrast, a stock split simply changes the number of shares outstanding and their par value, without transferring any assets or changing the total value of equity, thus no journal entry is required.

A Stock Dividend Requires a Journal Entry When Issued, but a Stock