Gujarat BoardEnglish MediumSTD 11 CommerceAccountP2 C3 Provisions and Reserves1 Mark
Question
Give four illustrations of capital reserve.
✓
Answer
Following are the sources of Capital reserve :
$(i)$ Profit on sale of fixed assets and investments.
$(ii)$ Profit on revaluation of fixed assets.
$(iii)$ Profit prior to incorporation of the company.
$(iv)$ Premium received by the companyon issue of shares or debentures.
$(v)$ Balance of share forfeiture account after reissue ofshares forfeited by the company.
$(vi)$ Capital redemption reserve for redeeming preferenceshare.
$(vii)$ Profit made in purchasing a business i.e. when the purchase price is less thanthe net assets acquired.
$(viii)$ Profit on redemption of debentures at discount
Need a full question paper?
Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.