'Bonus Shares' are issued by: MCQ with Answer and Explanation

Question

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'Bonus Shares' are issued by:

A. Private placement

B. Rights issue

C. Capitalizing reserves

D. Fresh issue to public

Answer: Option C

Solution (By JKSSB Mock Tests)

Bonus shares are issued to existing shareholders without consideration, by capitalizing reserves.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

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Which of the following errors will affect the Trial Balance?

A. Error of commission

B. Error of principle

C. Error of omission

D. One-sided error

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Correct Answer: Option D

Explanation:
A one-sided error (e.g., posting to only one account) causes disagreement in trial balance. Other errors may not affect the trial balance agreement.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

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A reserve created out of normal operating profits is called a:

A. Secret Reserve

B. Capital Reserve

C. Revenue Reserve

D. Specific Reserve

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Correct Answer: Option C

Explanation:
Revenue reserves are built from day-to-day operational net profits and can be utilized for distributing dividends.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

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In partnership, the guarantee of profit to a partner is given by:

A. The firm

B. The government

C. The auditor

D. The other partners

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Correct Answer: Option D

Explanation:
A guarantee of minimum profit to a partner is given by the other partners or the firm as a whole, and any deficiency is borne by the guarantor(s).

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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