How does a bonus issue of shares impact the equity of a company?
A) Total equity increases.
B) Total equity decreases.
C) Only the amount of issued share capital changes.
D) One equity account increases and another equity account decreases by an equal amount.

Question

Quizplus · Accepted Answer

A bonus issue of shares involves transferring amounts from one equity account (e.g., retained earnings or share premium) to another equity account (issued share capital), without changing the total equity of the company.

How Does a Bonus Issue of Shares Impact the Equity