Correct Answer:
B. Capitalizes reserves and brings in no cash
Existing reserves are converted into share capital; total equity remains unchanged.
November 13, 2026 · Accounting and Finance MCQs, Financial Accounting MCQs
A bonus issue of shares:
Related MCQs
In a progressive tax system:
A.
The average tax rate falls as income rises
B.
The same rate applies to all incomes
C.
The average tax rate rises as income rises
D.
Taxes are paid only by the poor
Correct answer is:
C. The average tax rate rises as income rises
Do you agree with this answer?
The matching principle requires that:
A.
Expenses are recorded in the same period as the revenues they helped to earn
B.
Debits equal credits
C.
Assets equal liabilities
D.
Revenues are recorded when cash is received
Correct answer is:
A. Expenses are recorded in the same period as the revenues they helped to earn
Do you agree with this answer?
The three categories of activities in a statement of cash flows are:
A.
Revenue, expenses and profit
B.
Operating, investing and financing
C.
Current, non-current and contingent
D.
Direct, indirect and mixed
Correct answer is:
B. Operating, investing and financing
Do you agree with this answer?
Audit sampling means applying audit procedures to:
A.
Every item in the population
B.
Only the largest item in the population
C.
Less than 100% of items in a population so that all sampling units have a chance of selection
D.
Items chosen by management
Correct answer is:
C. Less than 100% of items in a population so that all sampling units have a chance of selection
Do you agree with this answer?
Which Article of the Constitution of Pakistan provides for reports of the Auditor-General to be submitted to the President to be laid before Parliament?
A.
Article 10
B.
Article 62
C.
Article 199
D.
Article 171
Correct answer is:
D. Article 171
Do you agree with this answer?
Who is primarily responsible for preparing the financial statements?
A.
Management of the entity
B.
The external auditor
C.
The tax authority
D.
The internal auditor only
Correct answer is:
A. Management of the entity
Do you agree with this answer?
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