Homework Answers
Ans. : * This would not be acceptable under generally accepted accounting policy commonly known as GAAP. Stock dividend and stock split are two different terms.
* Stock dividend means company give additional shares of the company to the shareholders in place of giving them cash as dividend.
* In stock split, company issues two or more new shares of the company for every existing share an investor holds.
* Therefore it is concluded that both the terms can not be used interchangeably. Hence, treating stock dividend as stock split is not acceptable under GAAP.
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