Comparing and contrasting cash and stock dividends [5-10 min]
Compare and contrast the accounting for cash dividends and stock dividends.
Requirement
1. In the space provided, insert either “Cash dividends,” “Stock dividends,” or “Both cash dividends and stock dividends” to complete each of the following statements:
a.______ decrease Retained earnings.
b.______has(have) no effect on a liability.
c.______ increase paid-in capital by the same amount that they decrease Retained earnings.
d.______decrease both total assets and total stockholders’ equity,
resulting in a decrease in the size of the company.
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