Bonus shares - capitalisation

dear friends

my query is...

if in B/S both General Reserve and P & L is exist....

and

if in adjustments, Bonus Shares are issued by Capitalization of Profits..... 

which of the following is correct....

is it from General Reserve

OR

is it from P & L

1. General Reserve       A/c    Dr

          To Bonus Shares 

                 OR

2. P & L A/c                  Dr

          To Bonus Shares 

 

(whether to Debit to General Reserve OR to Debit to P & L)

 

 

 

 

 

Replies (3)

Any of these can be utilised ...........there is provision that free reserve or profit...so any can be utilised....

Yes, as said by Saroj, any of them can be utilised for issuing bonus shares.

HELLO,

P/L AND GENERAL RESERVE BOTH ARE THE FREE RESERVE AND YOU HAVE UTILISED ANY OF THEM,

GENERALLY FIRST UTILISED THE P/L THEN IF ANY DEFICIENCY OCCUR THEN U UTILISED THE GENERAL RESERVE..

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