When bonus shares are issued:
A) total assets increase.
B) total liabilities increase.
C) retained profits increase.
D) shareholders may receive more dividends.

Question

Quizplus · Accepted Answer

Bonus shares are issued from retained earnings, so they do not affect total assets or liabilities. They do not increase retained profits, but shareholders may receive more dividends in the future due to increased shareholding.

When Bonus Shares Are Issued