The purchase of treasury stock has no effect on common stock outstanding. decreases common stock outstanding. decreases common stock issued. decreases common stock authorized. When preferred stock is cumulative, preferred dividends not declared in a period are called dividends in arrears. never paid. considered a liability. distributions of earnings. If a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is Paid-in Capital in Excess of Par. Stock Dividends. Common Stock Dividends Distributable. Common Stock