Directors can use stock dividends to keep the market price of the stock affordab

Question

Directors can use stock dividends to keep the market price of the stock affordable. Stock dividends provide evidence of management's confidence that the company is doing well. Stock dividends do not reduce assets or equity. Stock dividends decrease the number of shares outstanding. Stock dividends transfer a portion of equity from retained earnings to contributed capital.

A stock dividend: Is not a liability on the balance sheet. Does not reduce a corporation's assets and stockholders' equity. Transfers a portion of equity from retained earnings to contributed capital. Does not affect total equity, but does affect the components of equity. All of these.

Prior period adjustments are reported in the: Multiple-step income statement. Balance sheet. Statement of retained earnings. Statement of cash flows. Single-step income statement.

The withdrawals account of each partner is: Closed to that partner's capital account with a credit. Closed to that partner's capital account with a debit. A permanent account that is not closed. Credited with that partner's share of net income. Debited with that partner's share of net loss.

A bonus may be paid: By a new partner when the current value of a partnership is greater than the recorded amounts of equity. By a withdrawing partner to remaining partners if the recorded value of the equity is overstated. To a new partner with exceptional talents. By remaining partners to a withdrawing partner if the recorded equity is understated. All of these.

Explanation / Answer

A bonus may be paid:

By a new partner when the current value of a partnership is greater than the recorded amounts of equity.

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The withdrawals account of each partner is:By a new partner when the current value of a partnership is greater than the recorded amounts of equity.

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A stock dividend:Does not reduce a corporation's assets and stockholders' equity.

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Stock dividends decrease the number of shares outstanding.---wrong

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