CA Foundation Exam  >  CA Foundation Questions  >  Which of the following can be utilized for th... Start Learning for Free
Which of the following can be utilized for the issue of bonus shares?
  1. Balance of profits & loss account
  2. Capital Reserve
  3. Dividend Equalization Fund
  4. Development Rebate Reserve
  5. Profit Prior to Incorporation
Select the correct answer from the options given below
  • a)
    1, 3, and 5 only
  • b)
    2 and 4 only
  • c)
    1 and 3 only
  • d)
    1, 2, 3, and 5 only
Correct answer is option 'C'. Can you explain this answer?
Verified Answer
Which of the following can be utilized for the issue of bonus shares? ...
Utilization of Different Reserves for Issuing Bonus Shares


  • Balance of profits & loss account: This can be used for the issue of bonus shares as it represents the accumulated profits of the company.

  • Capital Reserve: Capital reserves are created out of the profits which are not distributable as dividends. They can be utilized for issuing bonus shares.

  • Dividend Equalization Fund: This fund is created to equalize dividends, and it can also be utilized for issuing bonus shares.

  • Development Rebate Reserve: This reserve is created out of development rebates, and it can be used for issuing bonus shares.

  • Profit Prior to Incorporation: Profits earned before the company was incorporated can also be utilized for issuing bonus shares.


Correct Answer

Based on the options given, the correct answer is 1 and 3 only (Option C).
View all questions of this test
Explore Courses for CA Foundation exam
Which of the following can be utilized for the issue of bonus shares? Balance of profits & loss account Capital Reserve Dividend Equalization Fund Development Rebate Reserve Profit Prior to IncorporationSelect the correct answer from the options given belowa)1, 3, and 5 onlyb)2 and 4 onlyc)1 and 3 onlyd)1, 2, 3, and 5 onlyCorrect answer is option 'C'. Can you explain this answer?
Question Description
Which of the following can be utilized for the issue of bonus shares? Balance of profits & loss account Capital Reserve Dividend Equalization Fund Development Rebate Reserve Profit Prior to IncorporationSelect the correct answer from the options given belowa)1, 3, and 5 onlyb)2 and 4 onlyc)1 and 3 onlyd)1, 2, 3, and 5 onlyCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following can be utilized for the issue of bonus shares? Balance of profits & loss account Capital Reserve Dividend Equalization Fund Development Rebate Reserve Profit Prior to IncorporationSelect the correct answer from the options given belowa)1, 3, and 5 onlyb)2 and 4 onlyc)1 and 3 onlyd)1, 2, 3, and 5 onlyCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following can be utilized for the issue of bonus shares? Balance of profits & loss account Capital Reserve Dividend Equalization Fund Development Rebate Reserve Profit Prior to IncorporationSelect the correct answer from the options given belowa)1, 3, and 5 onlyb)2 and 4 onlyc)1 and 3 onlyd)1, 2, 3, and 5 onlyCorrect answer is option 'C'. Can you explain this answer?.
Solutions for Which of the following can be utilized for the issue of bonus shares? Balance of profits & loss account Capital Reserve Dividend Equalization Fund Development Rebate Reserve Profit Prior to IncorporationSelect the correct answer from the options given belowa)1, 3, and 5 onlyb)2 and 4 onlyc)1 and 3 onlyd)1, 2, 3, and 5 onlyCorrect answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation. Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Which of the following can be utilized for the issue of bonus shares? Balance of profits & loss account Capital Reserve Dividend Equalization Fund Development Rebate Reserve Profit Prior to IncorporationSelect the correct answer from the options given belowa)1, 3, and 5 onlyb)2 and 4 onlyc)1 and 3 onlyd)1, 2, 3, and 5 onlyCorrect answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of Which of the following can be utilized for the issue of bonus shares? Balance of profits & loss account Capital Reserve Dividend Equalization Fund Development Rebate Reserve Profit Prior to IncorporationSelect the correct answer from the options given belowa)1, 3, and 5 onlyb)2 and 4 onlyc)1 and 3 onlyd)1, 2, 3, and 5 onlyCorrect answer is option 'C'. Can you explain this answer?, a detailed solution for Which of the following can be utilized for the issue of bonus shares? Balance of profits & loss account Capital Reserve Dividend Equalization Fund Development Rebate Reserve Profit Prior to IncorporationSelect the correct answer from the options given belowa)1, 3, and 5 onlyb)2 and 4 onlyc)1 and 3 onlyd)1, 2, 3, and 5 onlyCorrect answer is option 'C'. Can you explain this answer? has been provided alongside types of Which of the following can be utilized for the issue of bonus shares? Balance of profits & loss account Capital Reserve Dividend Equalization Fund Development Rebate Reserve Profit Prior to IncorporationSelect the correct answer from the options given belowa)1, 3, and 5 onlyb)2 and 4 onlyc)1 and 3 onlyd)1, 2, 3, and 5 onlyCorrect answer is option 'C'. Can you explain this answer? theory, EduRev gives you an ample number of questions to practice Which of the following can be utilized for the issue of bonus shares? Balance of profits & loss account Capital Reserve Dividend Equalization Fund Development Rebate Reserve Profit Prior to IncorporationSelect the correct answer from the options given belowa)1, 3, and 5 onlyb)2 and 4 onlyc)1 and 3 onlyd)1, 2, 3, and 5 onlyCorrect answer is option 'C'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
Explore Courses for CA Foundation exam

Top Courses for CA Foundation

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev