1.When a company issues stockdividends:

A.liabilities are increased.

B.common stock is decreased.

C.dividends are decreased.

D.retained earnings are decreased.

2.Which of the following is TRUE regarding treasurystock?

A.Treasury Stock increasesstockholders' equity

B.Treasury Stock has a credit balance

C.Treasury Stock is recorded at cost

D.Treasury Stock is a contra asset account

3.Stella, Inc. has240,000 shares of $5par common stock outstanding. They have declared a10% stock dividend. The current market price of the common stock is$11/share. What is the amount that will be debited to Retained Earnings on the date ofdeclaration?

A.$264,000

B.$384,000

C.$120,000

D.$132,000

4.Before a 41 stocksplit, the shares outstanding were 7,000 shares at $24 par. After thesplit, what was the par value and number ofshares?

A.28,000 shares and $6/share

B.28,000 shares and $24/share

C.35,000 shares and $24/share

D.7,000 shares and $144/share

5.Before a 41 stocksplit, the shares outstanding were60,000 shares at$80.00 par. After thesplit, what was the par value and number ofshares?

A.240,000 shares and$80.00/share

B.240,000 shares and$20.00/share

C.15,000 shares and$20.00/share

D.15,000 shares and$80.00/share