A-LevelAccountingCompany AccountsMay/June 2023Paper 1 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?

Q: What is the correct answer to this A-Level Accounting question?

The correct answer is D: share premium.

Q: What topic does this question test?

This question tests Company Accounts in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Abank

Bgeneral reserve

Cretained earnings

Dshare premium

✓ Correct Answer

The correct answer is D: share premium

📋 Examiner Report & Trap Analysis

Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...

🎯 Mark Scheme Breakdown

Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.

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About This A-Level Accounting Question

Topic

This multiple-choice question tests Company Accounts in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

Source

This question appeared in the Cambridge A-Level Accounting May/June 2023 examination, Paper 1 Variant 2.

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