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When a stock dividend is declared, which of the following accounts is credited?

A) Common Stock

B) Dividend Payable

C) Stock Dividends Distributable

D) Retained Earnings

Sagot :

anthougo

When a stock dividend is declared, the account credited is C) Stock Dividends Distributable.

What is a stock dividend?

A stock dividend is a dividend in the form of shares instead of cash.

The declaration of a stock dividend ultimately increases the Common Stock and reduces the Retained Earnings.  This journal entry is not carried out immediately.

Instead, the Stock Dividend account is debited upon declaration while the Stock Dividends Distributable is credited.

When the stock is distributed, then the Stock Dividends Distributable is debited to close it off by crediting the Common Stock account.  The Retained Earnings are debited to close the Stock Dividend account.

Thus, upon declaring a stock dividend, the account credited is Option C.

Learn more about the stock dividend at https://brainly.com/question/2960815

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