Answered: Both cash dividends and stock…

Both cash dividends and stock dividends: a. Reduce total assets. b. Reduce total liabilities. c. Reduce total stockholders’ equity. d. Reduce retained earnings.

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter21: Corporations: Taxes, Earnings, Distributions, And The Statement Of Retained Earnings

Section: Chapter Questions

Problem 4MC

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Question

Both cash dividends and stock dividends:
a. Reduce total assets.
b. Reduce total liabilities.
c. Reduce total stockholders’ equity.
d. Reduce retained earnings.

Definition Definition Assets available to stockholders after a company's liabilities are paid off. Stockholders’ equity is also sometimes referred to as owner's equity. A stockholders’ equity or book value generally includes common stock, preferred stock, and retained earnings and is an indicator of a company's financial strength.

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