Many of the candidates performed very well in this question. A few candidates however, could not give examples of capital reserves and revenue reserves.
The examples of :
(i) capital reserves are:
- Share premium
- Capital redemption reserve fund
- Revaluation surplus
- Pre-incorporation profits
- Forfeited shares
- Assets replacement fund etc.
(ii) Revenue Reserves:
- retained profit
- debenture premium
- profit on redemption of debentures
- general reserves etc.
