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Match Each Item/event Pair Below with the Indicated Change in the Item

Question 3

Matching

Match each item/event pair below with the indicated change in the item. An individual classification may be used more than once, or not at all. For each dividend, assume that both declaration and payment or distribution has occurred.

Item   Event

Premises:
Par value per common share   Cash dividend
Book value per share   Stock dividend
Total retained earnings   Stock split
Total stockholders' equity   Prior period adjustment increases last year's net income
Earnings per common share   Restriction of retained earnings
Total retained earnings   Change in accounting principle
Number of common shares outstanding   Stock dividend
Total retained earnings   Cash dividend
Par value per common share   Stock dividend
Total paid-in capital   Stock dividend
Responses:
Item increases
Item decreases
Item is unchanged
Direction of change cannot be determined

Correct Answer:

Total retained earnings   Cash dividend
Item decreases
Number of common shares outstanding   Stock dividend
Item increases
Total paid-in capital   Stock dividend
Item increases
Par value per common share   Stock dividend
Item is unchanged
Book value per share   Stock dividend
Item decreases
Par value per common share   Cash dividend
Item is unchanged
Total stockholders' equity   Prior period adjustment increases last year's net income
Item increases
Total retained earnings   Stock split
Item is unchanged
Total retained earnings   Change in accounting principle
Direction of change cannot be determined
Earnings per common share   Restriction of retained earnings
Item is unchanged
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