Day: March 6, 2023

A company makes a bonus issue of shares.

What is the effect on the net assets and the reserves in the balance sheet?

Select ONE answer:

1. net assets increase and reserves decrease
2. net assets increase and reserves unchanged
3. net assets unchanged and reserves decrease
4. net assets unchanged and reserves increase

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.