State either T (true) or F (false) for each of the following statements. Each is worth ½ point. 1. Stock dividends and stock splits never result in the recognition of a liability. 2. When there is a stock split, all common accounts (including paid in capital and treasury stock) split. 3. The par value refers to the amount that the common shareholders would pay in case of a bankruptcy. 4. Restricted stock has become more popular than stock options since executives do not need to give cash and there is less risk if the stock drops in price. 5. Alex had a net loss and declared dividends. The dividend was properly recorded by reducing Paid In Capital. 6. Arguments for expensing stock options are: there is no effect to current stockholders, executives are receiving dividends, options are traded regularly on the open market, and options are immaterial. 7. Under SAR plans, if the market price drops below the threshold comparison price, a loss is recognized. 8. The book value rather than the fair value of the property should be used when declaring a property dividend. 9. Preferred stock is not cumulative nor participating. After current dividends are allocated, common gets

Answer rating: 100% (QA)

Here are the statements with their corresponding answers T True T True F False F False F False F False T True F False F False Explanation for each sta... View the full answer