Declaration and issuance of a stock dividend
A) has no effect on total assets, liabilities, or shareholders' equity.
B) decreases the amount of working capital.
C) decreases total shareholders' equity.
D) increases the current ratio.

Question

Quizplus · Accepted Answer

A stock dividend is essentially the distribution of additional shares of stock to existing shareholders. This does not impact the total assets, liabilities, or shareholders' equity of the company since it is merely a redistribution of ownership. As such, it does not affect the amount of working capital or the current ratio.

Declaration and Issuance of a Stock Dividend