Accounting 9706 · AS & A Level · The accounting system

The accounting system — practice question

A company uses a revenue reserve in order to carry out a bonus issue of ordinary shares. Which accounts should be debited and which should be credited to record this?

  • ADebit general reserve, credit share capital
  • BDebit share capital, credit general reserve
  • CDebit share capital, credit retained earnings
  • DDebit share premium, credit share capital

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