What is the effect of the declaration and subsequent issuance of a stock split (not effected in the form of a stock dividend) on each of the following?

What is the effect of the declaration and subsequent issuance of a stock split (not effected in the form of a stock dividend) on each of the following?




A) Retained earnings: no effect; Paid-in capital: no effect
B) Retained earnings: no effect; Paid-in capital: increase
C) Retained earnings: increase; Paid-in capital: decrease
D) Retained earnings: decrease; Paid-in capital: increase





Answer: A


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