Which of the following is true of a stock dividend It is a l

Which of the following is true of a stock dividend?

It is a liability on the balance sheet.

The decision to declare a stock dividend resides with the shareholders.

Transfers a portion of equity from retained earnings to a cash reserve account.

Does not affect total equity, but transfer amounts between the components of equity.

Reduces a corporation\'s assets and stockholders\' equity.

Solution

Answer: The only True statement about the stock dividend is given by fourth option

\"Does not affect total equity, but transfer amounts between the components of equity.\"