ACCA FA · Chapter 9 · Question 8 of 10
Which of the following transactions increases the total equity of a company?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) An issue of ordinary shares for cash
Explanation
An issue of shares for cash increases assets and share capital (and share premium), so total equity increases. A dividend reduces equity, a bonus issue reallocates amounts within equity without changing the total, and repaying a loan reduces assets and liabilities without affecting equity.
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