11) The declaration of a stock dividend creates a liability
11) The declaration of a stock dividend creates a liability for the corporation.
12) A stock split decreases par value per share, whereas stock dividends do not affect par value per share.
13) A stock split, like any other stock issuance, cannot involve issuing more shares of stock than authorized in the corporate charter.
14) A 3-for-1 stock split of a $3 par value share will result in three shares of $1 par value.
15) Memorandum entry is an entry in the journal that notes a significant event, but has no debit or credit amount.
16) Which of the following is true of dividends?
A) Dividends are a distribution of cash, stock, or other assets to the stockholders.
B) Dividends increase assets and decrease total stockholders' equity of a corporation.
C) Dividend payments decrease paid-in capital.
D) Dividend payments increase stockholders' equity.
17) A corporation declares a dividend of $0.50 per share on 10,000 shares of common stock. Which of the following would be included in the entry to record the declaration?
A) Retained Earnings would be debited for $5,000.
B) Paid-In Capital in Excess of Par—Common would be credited for $5,000.
C) Retained Earnings would be credited for $5,000.
D) Dividends Payable—Common would be debited for $5,000.
18) On the ________, cash dividends become a liability of a corporation.
A) declaration date
B) date of record
C) end of the fiscal year
D) payment date
19) Which of the following would be included in the entry to record the payment of a previously declared dividend of $0.25 per share on 12,500 shares of common stock?
A) Retained Earnings would be debited for $3,125.
B) Cash would be debited for $3,125.
C) Retained Earnings would be credited for $3,125.
D) Dividends Payable would be debited for $3,125.
20) Which of the following occurs when a previously declared dividend is paid?
A) Assets increase.
B) Stockholders' equity increases.
C) Liabilities decrease.
D) Assets remain unchanged.