Question

If a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is

A) Common Stock Dividends Distributable.
B) Common Stock.
C) Paid-in Capital in Excess of Par.
D) Retained Earnings

Answer 1

The account to be debited on the date of declaration of a 10% stock dividend on its common stock is Common Stock Dividends Distributable.

Step-by-step explanation:

When a corporation declares a 10% stock dividend on its common stock, the account to be debited on the date of declaration is Common Stock Dividends Distributable.

This account represents the portion of the dividends that has been declared but not yet distributed to the stockholders. By debiting this account, the corporation recognizes its obligation to distribute the stock dividends to the stockholders.