Stock Dividends definitions Flashcards
Stock Dividends definitions
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Stock Dividend Distribution of additional shares to shareholders, reallocating equity from retained earnings to common stock and APIC without affecting total equity. Retained Earnings Equity account reduced by the value of stock dividends, representing accumulated profits not distributed as cash. Common Stock Equity account credited for the par value of new shares issued in a stock dividend, reflecting ownership in the company. Additional Paid-In Capital Equity account credited for the excess of stock dividend value over par, representing shareholder contributions above par value. Par Value Nominal value assigned to each share, used to allocate part of the stock dividend to the common stock account. Market Price Current trading value of a share, used to calculate the total dollar amount of a stock dividend. Outstanding Shares Total shares currently held by shareholders, used as the base for calculating stock dividend percentages. Small Stock Dividend Stock dividend representing less than 20-25% of outstanding shares, accounted for at market value. Equity Section of the balance sheet affected by stock dividends, including retained earnings, common stock, and APIC. Journal Entry Accounting record showing the reduction of retained earnings and the increase in common stock and APIC for a stock dividend. Percentage Declaration Proportion of outstanding shares specified by the company to determine the size of a stock dividend. Redistribution Reallocation of amounts within equity accounts when a stock dividend is issued, leaving total equity unchanged. Dividend Amount Total value of additional shares distributed, calculated by multiplying new shares by market price. Shareholder Individual or entity receiving additional shares through a stock dividend, maintaining proportional ownership. Balance Sheet Financial statement where equity accounts are adjusted to reflect the effects of a stock dividend.
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