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NEW QUESTION: 1
Stock dividends have the greatest impact on which section of the balance sheet?
A. total stockholders' equity
B. total assets and total stockholders' equity
C. the components of stockholders' equity
D. retained earnings
E. total assets
The effect of stock dividends is recorded by transferring part of the retained earnings to the contributed capital accounts. Because of the increase in contributed, it is often described as capitalizing retained earnings.