A-LevelAccountingPreparation of financial statements9706/12 · May/June 2023 · Q171 Mark

A company had sufficient balances in each of the share premium, general reserve and retained earnings accounts to issue bonus shares. During the year, bonus shares were issued. The directors decided to keep the reserves in their most flexible form. Which ledger account will be debited on the issue of the bonus shares?

Abank

Bgeneral reserve

Cretained earnings

Dshare premium

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D: share premium

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Topic: Preparation of financial statements, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, May/June 2023 Paper 1 Variant 2, question 17.

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