Question

A Stock Split and a Stock Dividend require the same entry.

Select one:

True

False

Answer 1

False

Stock dividends are recorded by moving amounts from retained earnings to paid-in capital.

the total par value of shares outstanding is not affected by a stock split (i.e., the number of shares times par value per share does not change). Therefore, no journal entry is needed to account for a stock split. The only journal entry needed for a stock split is a memo entry to note that the number of shares has changed and that the par value per share has changed (if the stock has a par value).