When a Share Dividend of 20 000 $1 Shares, Is

question 62

Multiple Choice

When a share dividend of 20 000 $1 shares, is declared and paid, the effect on total equity in the company balance sheet is a(n) :

• A) increase in share capital of $20 000 and a decrease in reserves of $20 000, i.e. no change in total equity.
• B) increase in total equity of $20 000.
• C) decrease in total equity of $20 000.
• D) increase in the number of issued shares and a decrease in the book value of each share.