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Question
What will be the effect of issue of bonus shares on cash flow statement?
Options
No effect
Inflow in financing activity
Inflow in operating activity
Inflow in investing activity
MCQ
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Solution
No effect
Explanation:
Capitalizing reserves results in the issuance of bonus shares but does not involve any actual cash transactions. Therefore, the cash flow statement remains unchanged, as there is no change in cash flow.
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