Concept:Bonus shares are issued by capitalizing realized reserves such as share premium, capital redemption reserve, or general reserve.
An unrealized reserve, like revaluation reserve, cannot be used for issuing bonus shares.
Explanation:Share premium arises from issuing shares above their nominal value and is a capital reserve.
Capital redemption reserve fund is created when preference shares are redeemed out of profits and is also a capital reserve.
General reserve consists of accumulated realized profits.
Each of these can be converted into paid-up share capital for bonus shares.
A revaluation reserve arises from an increase in the value of fixed assets and is an unrealized profit.
Unrealized profits are not distributable and are not allowed for bonus share issues.
So the reserve not used for bonus shares is the revaluation reserve.
In the given options, this is listed as “revolutional reserve”.
Answer:A. revolutional reserve (revaluation reserve)