Which of the Following Is NOT True with Respect to Bonus

question 10

Multiple Choice

Which of the following is NOT true with respect to bonus shares? They:

• A) increase net assets.
• B) have no effect on cash balances.
• C) give directors the opportunity to signal future dividend policy to current and future shareholders.
• D) total shareholders' equity increases.

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Definitions:

Variable Costs

Expenses that change in proportion to the amount of goods produced or the volume of sales.

Fixed Costs

Expenses that do not change with the level of production or sales in the short term, such as rent or salaries.

Unit Selling Price

The amount of money charged to the customer for a single unit of a product or service.

Unit Sales Price

The price at which a single unit of product is sold, reflecting the cost plus any markup or minus any discounts.