New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    Which among the following will increase the net worth of

    an organisation?
    A Right shares Correct Answer Incorrect Answer
    B IPO Correct Answer Incorrect Answer
    C Bonus Shares Correct Answer Incorrect Answer
    D A and b Correct Answer Incorrect Answer
    E All of the above Correct Answer Incorrect Answer

    Solution

    From an accounting perspective, a bonus issue is a simple reclassification of reserves which causes an increase in the share capital of the company on the one hand and an equal decrease in other reserves. · The total shareholders’ funds of the company therefore remain the same although its composition is changed.

    Practice Next

    Relevant for Exams: