Question

If a company declares a 2-for-1 share split, which of the following is NOT true?

		No entry is recorded, as it is not an accounting transaction
		Share splits result in additional issued shares
		The number of issued shares is doubled, while the dividends are payable on half of the amount before the split
		The number of issued shares are twice the number that were previously issued before the split

Answer 1

Option c:The number of issued shares is doubled, while the dividends are payable on half of the amount before the split

Reason : Dividend payable on full amount not on partial share split leads to split between shares not on total value.Total value trains same .

Example: 10$ of 100000= $1000000

Sharesplit: $5 of 200000= $1000000.

Dividend declare on no of shares they have.

All other options are true

A) Memo entry will be recorded,it doesn't effect the accounting transaction.

B)true

D) true