Which of the following statements about a stock split is correct?
A)A stock split decreases Retained Earnings.
B)Stock splits do not require a journal entry.
C)Stock splits are the same as stock dividends.
D)Stock splits increase the par value per share.

Question

Quizplus · Accepted Answer

Stock splits are not dividends.A stock split involves a decrease in the par value of the stock and an offsetting increase in the number of authorized shares.Retained Earnings is not affected.The company's financial position does not change and,as a result,no journal entry is needed.

Which of the Following Statements About a Stock Split Is