FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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why is this statement false?
Small and large stock dividends have no effect on the Common Stock account.
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- Statement I. Appropriation reserve is used to restrict earnings available for dividends Statement II. The issuance of stock dividends increases share capital and total shareholders' equity a. Statement I and II are trueb. Statement I and II are falsec. Statement I is true, Statement II is falsed. Statement I is false, Statement II is truearrow_forwardIf a preferred stock is of the cumulative type, a. dividends cannot be passed if they are earned. b. unpaid dividends of one period must be carried forward and paid in subsequent periods before anything can be paid to common stockholders. c. dividends must be paid, and if not a liability is created. d.dividends must be paid on an equal basis with common stock, so long as earnings permit.arrow_forwardWhich 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 equityarrow_forward
- 2. What does it mean when shares of stock are outstanding?arrow_forwardstock splits are similar to stock dividends in that both reduce retained earnings and have no effect on par true falsearrow_forwardWhich of the following statements is false? options: Outstanding shares equals issued shares minus treasury shares. Equity value equals shares outstanding times share price. Equity value equals enterprise value plus debt. Authorized shares might be interesting but not relevant in any of our calculations Enterprise value equals equity value plus debt value.arrow_forward
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