Which statement is false? - stock dividend increases the amount of paid in capital -Stock splits cause no change in the amount of the stockholder's equity - stock splits increase the number of shares -stock dividend increases total stockholders equity

Which statement is false? - stock dividend increases the amount of paid in capital -Stock splits cause no change in the amount of the stockholder's equity - stock splits increase the number of shares -stock dividend increases total stockholders equity

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

See similar textbooks

Related questions

Q: .Which of the following would not be found on the statement of changes in stockholders’ equity? a.…

A: Shareholder's Equity: It is the sum of the share capital and reserves and surplus / retain earnings.…

Q: A stock splita. has no effect on total stockholders’ equity.b. increases assets and stockholders’…

A: Answer: Option a

Q: The declaration and issuance of a dividend in shares (stock dividend) greater than 25% of the shares…

A: In place of cash payments, a stock dividend seems to be a distribution of corporation shares to…

Q: Cash dividends, property dividends, and scrip dividends are examples of dividends that_ Select one:…

A: Retained Earnings - Retained Earnings is the company's accumulated earnings that is retained by the…

Q: When a dividend is declared and paid in stock * Choices; stockholders' equity does not change.…

A: Stock dividends are distributions to shareholders that companies make when they do not wish to…

Q: Vhich of the following is FALSE regarding common stock? The constant growth model assumes that…

A: A common stock seems to be a portion of ownership in an organization that grants its bearers voting…

Q: Dividends are paid from a company's after-tax earnings Common stockholders are the residual…

A: Step 1 A security that reflects ownership in a business is known as common stock. Common…

Q: When stock dividends are distributed stock dividends distributable is decreased. retained earnings…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: Determining the effects of cash dividends, stock dividends, and stock splits Complete the following…

A: Cash dividend: Dividends can be paid in the form of Cash or bank transfer. When the company pays…

Q: The company tend to raise financial capital through selling stocks in the secondary markets. Select…

A: There are two market one is primary market and other is secondary market.

Q: in recording a small stock dividend, retained earnings is debited while in recording a large stock…

A: >Dividends are the amounts given to stockholders for their investments in stock. >Dividends…

Q: Indicate the effect of each of the following transactions on total stockholders' equity by placing…

A: The answer to the given question is Increase Decrease No Effect 1. Treasury stock is resold…

Q: Which of the following statement is true about "Cumulative Stock Dividends in Arrears? Select all…

A: Cumulative stock dividend in arrears is dividend payable but not yet paid to preferred stock…

Q: The primary purpose of a stock split is to a. reduce the market price of the stock per share. b.…

A: Stock split is a situation in which the shares are split in a ratio which increases the total number…

Q: The earnings per share of a company decreased if the additional capital it wanted was obtained by…

A: EPS(Earnings per share) shows amount of total net earnings of an entity that belongs to each unit of…

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

A: The term A 2- for -1 stock split means the company grants 2 shares for every one share held. A stock…

Q: Which one of the following statements is NOT true relating to dividends? 1. Dividends are a portion…

A: 5. 2. Dividends need not be declared solely from the profit of the current year include profits from…

Q: The declaration and issuance of a dividend in shares (stock dividend) greater than 25% of the shares…

A: In case of a stock dividend greater than 25% (also known as large stock dividends), the journal…

Q: Which of the following is the reason that preferred dividends declared during the period are…

A: Identify the correct option: Earnings per share (EPS): The amount of net income available to each…

Q: A small stock dividend decreases common stock. has no effect on total equity. increases Retained…

A: A Stock Dividend is the payment of dividends in the forms of shares of the company. In cash crunch…

Q: How does a 2: 1 stock split (stock-split-up) affect the following two items? Par Value per Share…

A: stock split is a decision by a company's board of directors to increase the number of shares that…

Q: A(n) __________ occurs when there is an increase in the number of shares outstanding by reducing the…

A: Lets understand all options. Stock split is a split one share to more than one share. It is done by…

Q: A stock split will cause a change in which of the following items? Cash Common stock…

A: Stock Split will be reflective of the corporate event in which the share of company will be splitted…

Q: AVP company directors want to issue stock dividends to its investors. Which one of the following…

A: Whenever a corporation decides to pay dividends to its shareholders, it has two options to payout…

Q: Stock splits and stock dividends have the following effects on Total Stockholders' Equity: Select…

A: Equity, in the financial statements of any entity, represents the ownership of the shareholders in…

Q: Why do companies often repurchase stock instead of paying cash dividends? What is the effect for the…

A: Dividends are the returns that will be paid to the investors who hold the stock of the company. This…

Q: Indicate the principal effects of a stock dividend versus a stock split on the issuing corporation.…

A: Stock dividend is given / issued out of retained earnings. Stock split is only the change in the…

Q: TRUE/FALSE When preferred stock has a preference as to dividends, the current year's preferred…

A: Preferred stock, is a special type of share where dividends are paid to shareholders prior to the…

Q: Stock splits are given for all the reasons EXCEPT for in increases the number of outstanding shares…

A: The stock split is a way to provide dividend to shareholders.

Q: Which of the following statements is false? Multiple Choice Both stock splits and stock dividends…

A: The appropriate answer is (C). Reallocation of amounts between the retained earnings and contributed…

Q: Which of the following statements is NOT true? A. Stock owners benefit from stock price…

A: Stock or Share refers to smallest part in which total capital of entity is divided. Stock has face…

Q: The prescribed accounting treatment for stock dividends implicitly assumes that shareholders are…

A: Stock Dividends: It refers to the payment of dividends by a company to its existing shareholders, in…

Q: Answer the following as True or False, and then select the correct multiple choice answer:…

A: Stock dividend is a method of capitalizing the retained earning. Under this, no profit is…

Q: Which statement regarding treasury stock is false?a. Treasury stock is considered to be issued but…

A: Treasury stock: The shares which were reacquired or bought back by the company, but not formally…

Q: Each of the following decreases total stockholders' equity except a stock dividend, cash dividend. O…

A: A decrease in stockholders' equity happens when a company distributes its earnings by way of…

Q: If a preferred stock is of the cumulative type, a. dividends cannot be passed if they are earned.…

A: Preferred stock carry fixed rate of dividends that must be paid each year.

Q: (b) Your answer is incorrect. If the preferred stock is not cumulative, how much of the $750,000…

A: Dividend arrears are paid for cumulative preferred stockholders. Dividend arrears are not paid for…

Q: Which of the following statement is false? A -Both stock splits and stock dividends increase the…

A: Stock split is division of shares on par value , thereby decreasing price of shares in market, and…

Q: When a firm is short of cash yet it wishes to distribute something to shareholders, it should…

A: The following are some of the types of Dividends Cash Dividend Stock Dividend Liquidating Dividend…

Q: why is this statement false? Small and large stock dividends have no effect on the Common Stock…

Question

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.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction:

VIEW

Step 2 Answer and Explanation:

VIEW

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a stock dividend resides with shareholders. C. It does not affect total equity but transfers amounts between equity components. D. It creates a cash reserve for shareholders.
d. (1) What are the two primary ways companies raise common equity? (2) Why is there a cost associated with reinvested earnings? (3) Jana doesnt plan to issue new shares of common stock. Using the CAPM approach, what is Janas estimated cost of equity?
Which of the following statements about stock dividends is not true? Stock dividend is the only type of dividend that does not reduce stockholders’ equity. Stock dividend is the only type of dividend that does not reduce retained earnings. Stock dividend does not affect par value per share. Stock dividend may or may not affect paid-in capital in excess of par.
All of the following are correct regarding stock dividends except: 1) total stockholders’ equity is the same before and after the stock dividend. 2) they usually result in a decrease in the stock price. 3) they are not taxable to the issuing corporation or the shareholders. 4) they result in a real economic gain in cash to the shareholders.
Answer the following as True or False, and then select the correct multiple choice answer: _________Declaring and paying a stock dividend decreases both Retained Earnings and Stockholders' Equity in total on the balance sheet ________Stock splits have no impact on Stockholders' Equity, but do change the par value of the stock. _______ Treasury Stock is considered a contra-equity account and therefore decreases the company's total Stockholders' Equity balance.
Which of the following statements about stockholders' equity is not true? Select one: Stockholders' equity may be increased or decreased by Accumulated Other Comprehensive Income. Stockholders' equity is decreased by Treasury Stock. Stockholders' equity is decreased by a deficit in Retained Earnings. Stockholders' equity is increased by Additional Paid in Capital.
When a dividend is declared and paid in stock * Choices; stockholders' equity does not change. total stockholders' equity decreases. the current ratio increases. the amount of working capital decreases.
A small stock dividend decreases common stock. has no effect on total equity. increases Retained Earnings. Items a, b, and c are correct.
Which of the following is the reason that preferred dividends declared during the period are deducted from net income in calculating return on common stockholders’ equity? a. Preferred dividends are not paid from net income. b. Preferred dividends are not a part of stockholders’ equity. c. Preferred dividends are not paid until all common stockholders have received their dividends, so preferred dividends are not relevant in the formula and so must be taken out of the equation. d. Preferred dividends will reduce the amount of income available for distribution to common stockholders.
What effect will the acquisition of treasury stock have on stockholders' equity and earnings per share, respectively? a. Decrease and no effect b. Increase and no effect c. Decrease and increase d. Increase and decrease
Identify whether stockholders’ equity would increase (I), decrease (D), or have no effect (NE) as a resultof each separate transaction New shares of common stock are issued for cash.
A small stock dividend a. decreases common stock. b. has no effect on total equity. c. increases Retained Earnings. d. Items a, b, and c are correct.