Recording of a stock dividend does not result in a liability being recorded.

Name: Recording of a stock dividend does not result in a liability being recorded.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Recording of a stock dividend does not result in a liability being recorded because a stock dividend is a distribution of additional shares to existing shareholders and does not involve any payment of cash or other assets. Therefore, it does not create a liability for the company.

Recording of a Stock Dividend Does Not Result in a Liability