15.
The effect of a stock dividend is to
a. decrease total assets and stockholders' equity.
b. change the composition of stockholders' equity.
c. decrease total assets and total liabilities.
d. increase the book value per share of common stock.
16. If a corporation declares a 10% stock dividend on its common stock, the account to be
debited on the date of declaration is
a. Common Stock Dividends Distributable.
b. Common Stock.
c. Paid-in Capital in Excess of Par.
d. Retained Earnings.
17. Stock dividends and stock splits have the following effects on retained earnings:
Stock Splits Stock Dividends
a. Increase No change
b. No change Decrease
c. Decrease Decrease
d. No change No change
18. Which of the following statements regarding the date of a cash dividend declaration is not
accurate?
a. The dividend can be rescinded once it has been declared.
b. The corporation is committed to a legal, binding obligation.
c. The board of directors formally authorizes the cash dividend.
d. A liability account must be increased.
19. The declaration and distribution of a stock dividend will
a. increase total stockholders' equity.
b. increase total assets.
c. decrease total assets.
d. have no effect on total assets.
20. Xeris, Inc. has 1,000 shares of 5%, $10 par value, cumulative preferred stock and 50,000
shares of $1 par value common stock outstanding at December 31, 2015. What is the
annual dividend on the preferred stock?
a. $5 per share
b. $500 in total
c. $5,000 in total
d. $.05 per share
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