How many of these statements are true? The difference between a share split and a share dividend (bonus issue) is that 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 share dividend (bonus issue) increases the share capital and reduces the retained earnings, which is statement i, and it also requires accounting entries to be made in the ledger, which is statement iii. However, a share dividend does not affect the market price of the shares, so statement ii is false. Therefore, the correct answer is D) i, iii.

How Many of These Statements Are True? the Difference Between