If a corporation declares and distributes a 10% stock dividend on its common shares,the account debited is:
A)Dividends Payable.
B)Common Stock.
C)Share Capital.
D)Retained Earnings.

Question

Quizplus · Accepted Answer

When a corporation declares a stock dividend, it transfers an amount from Retained Earnings to Share Capital. This reflects the distribution of additional shares to shareholders without receiving new funds, thus reducing retained earnings.

If a Corporation Declares and Distributes a 10% Stock Dividend