If a corporation declares and distributes a stock dividend on its common shares:
A)the amount of total assets increases.
B)stockholders' equity decreases.
C)contributed capital decreases.
D)the account Retained Earnings is decreased.

Question

Quizplus · Accepted Answer

Stock dividends are recorded by transferring an amount from Retained Earnings to contributed capital accounts.This changes the composition of stockholders' equity,not the total amount.

If a Corporation Declares and Distributes a Stock Dividend on Its