Which of the following statements relating to the difference between a share split and a share dividend (bonus issue) are true?
A bonus issue, but not a share split:
I. increases the share capital and reduces the retained earnings.
II. reduces the market price of the shares.
III. requires accounting entries to be made in the ledger.

Question

Quizplus · Accepted Answer

A bonus issue increases the share capital by transferring amounts from retained earnings, requiring accounting entries, while a share split simply divides existing shares without affecting share capital or retained earnings.

Which of the Following Statements Relating to the Difference Between