[Solved] _____________ is made out of reserves or share premium.

_____________ is made out of reserves or share premium.

a) Preference shares

b) Bonus shares

c) Debentures

d) None of these

Answer: (b) Bonus shares is made out of reserves or share premium. Fully paid-up bonus shares may be issued only out of free reserves, securities premium account, or capital redemption reserve account. (Section 63(1) The bonus shares shall not be issued in lieu of dividends.

More MCQ and Answers on Auditing

  1. Which among the following is not a right of company auditors.
  2. Test checking is done when there is an effective system of _________
  3. Test checking means
  4. Audit working papers are
  5. Current audit file consists of
  6. ____ begins where accounting ends.
  7. ________audit is compulsory for joint stock companies.
  8. Treating revenue expenditure as capital expenditure is an example of error of
  9. Financial statements are prepared by
  10. Preliminary expanses not written off are treated as

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