{"id":47164,"date":"2024-04-15T22:22:50","date_gmt":"2024-04-15T22:22:50","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=47164"},"modified":"2024-04-15T22:22:50","modified_gmt":"2024-04-15T22:22:50","slug":"bonus-shares-cannot-be-issued-out-of","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/bonus-shares-cannot-be-issued-out-of\/","title":{"rendered":"Bonus shares cannot be issued out of:"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9752c0784d4\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"false\">\r\n                    Profit and Loss a\/c                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    Capital Redemption reserve                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    General reserve                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"true\">\r\n                    Dividend equalisation fund                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: <strong>D. Dividend equalisation fund<\/strong><\/p>\n<p>Bonus shares are shares issued by a company to its existing shareholders without any additional payment. They are issued out of the company&#8217;s reserves, such as the profit and loss account, capital redemption reserve, and general reserve.<\/p>\n<p>A dividend equalisation fund is a reserve that is created by a company to smooth out fluctuations in its dividend payments. It is funded by a portion of the company&#8217;s profits each year, and can be used to pay out dividends in years when the company&#8217;s profits are low.<\/p>\n<p>Bonus shares cannot be issued out of a dividend equalisation fund because the purpose of the fund is to smooth out fluctuations in dividend payments, not to issue bonus shares. If bonus shares were issued out of the dividend equalisation fund, it would defeat the purpose of the fund.<\/p>\n<p>Here is a brief explanation of each option:<\/p>\n<ul>\n<li><strong>A. Profit and Loss a\/c<\/strong> &#8211; The profit and loss account is a financial statement that shows a company&#8217;s income and expenses for a period of time. The profit and loss account can be used to calculate a company&#8217;s net income, which is the amount of money that the company has earned after deducting all of its <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> expenses. Bonus shares can be issued out of the profit and loss account.<\/li>\n<li><strong>B. Capital Redemption reserve<\/strong> &#8211; The capital redemption reserve is a reserve that is created when a company redeems its own shares. The capital redemption reserve can be used to issue bonus shares.<\/li>\n<li><strong>C. General reserve<\/strong> &#8211; The general reserve is a reserve that is created to meet unexpected expenses or to make capital investments. The general reserve can be <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> used to issue bonus shares.<\/li>\n<li><strong>D. Dividend equalisation fund<\/strong> &#8211; A dividend equalisation fund is a reserve that is created by a company to smooth out fluctuations in its dividend payments. It is funded by a portion of the company&#8217;s profits each year, and can be used to pay out dividends in years when the company&#8217;s profits are low. Bonus shares cannot be issued out of a dividend equalisation fund.<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Join Our Telegram Channel Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Bonus shares cannot be issued out of:<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/bonus-shares-cannot-be-issued-out-of\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bonus shares cannot be issued out of:\" 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