The Bonus Issue of Shares Has the Following Impact on the Equity

question 16

Multiple Choice

The bonus issue of shares has the following impact on the equity of a company

• A)total equity increases
• B)total equity decreases
• C)one equity account increases and another equity account decreases by an equal amount
• D)only the amount of issued share capital changes.

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Definitions:

Operating Activities

Activities related to the primary operations of a business, such as sales, supply chain management, and customer service.

Indirect Method

A method used in cash flow statement preparation that adjusts net income for changes in balance sheet accounts to convert it from accrual to cash basis.

Net Income

The total profit of a company after subtracting all expenses, taxes, and costs from total revenue.

Statement Of Cash Flows

A financial statement that highlights the major activities that impact cash flows and, hence, affect the overall cash balance.