A 2-for-1 stock split is declared. In this case, which of the following statements is true? A. The retained earnings fall. B. The common stock account rises. C. The cash account declines. D. The par value of the common stock is reduced.

A 2-for-1 stock split is declared. In this case, which of the following statements is true? A. The retained earnings fall. B. The common stock account rises. C. The cash account declines. D. The par value of the common stock is reduced.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 16MCQ

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Question

A 2-for-1 stock split is declared. In this case, which of the following statements is true?

A. The retained earnings fall.

B. The common stock account rises.

C. The cash account declines.

D. The par value of the common stock is reduced.

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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