Question

Which of the following statements is true with regard to

Q: Answer-Which of the following statements is true with regard to declaring and issuing of Bonus Shares?

when a company issues bonus shares, it typically utilizes its reserves or retained earnings to capitalize the shares. This means that the company is essentially converting a part of its reserves into share capital, which could result in a decrease in the reserves and surplus on the balance sheet.

declaring and issuing of Bonus Shares?

A Assets are transferred from the company to the shareholders.

B A Bonus issue results in decrease in reserves and surplus.

C A Bonus issue is same as declaration of dividends.

D A Bonus issue results devaluation of company.

E None of the above

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Solution