How Many of These Statements Are True? the Difference Between

question 26

Multiple Choice

How many of these statements are true? The difference between a share split and a share dividend (bonus issue) is that a bonus issue, but not a share split:
i. increases the share capital and reduces the retained earnings.
ii. reduces the market price of the shares.
iii. requires accounting entries to be made in the ledger.

• A) i.
• B) ii, iii
• C) i, ii
• D) i, iii

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Definitions:

Production Possibilities

A concept in economics that describes the maximum output combinations of goods or services an economy can achieve when all resources are fully and efficiently utilized.

Capital Goods

Long-lasting goods that are used in the production of other goods or services, such as machinery, buildings, and equipment.

Consumer Goods

Tangible items produced for personal use by individuals.

Production Possibilities Curve

A graphical representation showing the maximum number of goods or services that can be produced using limited resources efficiently.