Question

A company declares a​ 5% stock dividend. The debit to retained earnings is an amount equal to

Answer 1

Answer:

A company declares a​ 5% stock dividend.

The debit to retained earnings is an amount equal to - the market value of the shares, that are to be issued.

We can say that a retained earnings balance is increased when we are using a credit and this is decreased when we make a debit.

A retained earnings is the total amount of money left, after all the expenses and dividends are paid by the company.