What is the difference between a Stock Split and a Stock Dividend?

For the sake of consistency, start with the idea that you own 1,000 shares of Widgit Company and the current price is $30 per share.

A) Stock Dividend of 10%: You will be given 100 shares. On the companys books, there will be a Journal entry that debits Stock Dividends and credits Common Stock. The number of shares outstanding will not change. The shares that are given out as the dividend will be ones that the company owns.

B)Stock Split 2/1: You had 1,000 shares and now you have 2,000 shares. On the companys books, there will be no entry since it does not affect any of the accounts. There will be a notation that the number of shares has increased.