Question

Distinguish among: cash dividends, property dividends, liquidating dividends, and stock dividends.

Short answer

Dividends come in a variety of forms, some of which do not require monetary delivery to shareholders, such as property dividends, stock dividends, and liquidating dividends.

Step-by-step solution

Meaning of Cash Dividend

The cash dividend is by far the most popular sort of payout. The board of directors resolves on the date of the declaration to pay a certain dividend amount in cash to those investors who hold the company's stock on a specific date.

Meaning of Property Dividend

Rather than paying cash or stock to investors, a corporation may pay a non-monetary dividend.

This distribution should be recorded at the fair market value of the assets that were dispersed. Because the fair market value of the assets is likely to differ from the book value, the corporation will most likely record the difference as a gain or loss.

Meaning of liquidating Dividends

A liquidation dividend occurs when the board of directors wishes to return the capital given initially by shareholdersas a dividend. It may be a forerunner to the business being shut down.

Meaning of Stock Dividends

A stock dividend is the unrestricted distribution of a company's common stock to its common shareholders. Treat the transaction as a stock dividend if the corporation issues less than 25% of the total number of previously existing shares.

Distinction among all Above Dividend

A cash dividend is a monetary payment, whereas a property dividend is a distribution of non-cash assets. A liquidating dividend is not based on retained earnings. A stock dividend is anissue of additional sharesof a corporation's stock to existing owners in a nonreciprocal exchange with no change in the par or stated value.