Accounting 9706 · AS & A Level · Preparation of financial statements

Preparation of financial statements — practice question

A company carries out a $1$ for $4$ bonus issue of ordinary shares. What effect does this have on share capital and total equity?

  • Ashare capital increase, total equity decrease
  • Bshare capital increase, total equity increase
  • Cshare capital increase, total equity no change
  • Dshare capital no change, total equity increase

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