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What is the key difference between capital reserves and revenue reserves?
  • a)
    Capital reserves can be distributed as dividends, while revenue reserves cannot.
  • b)
    Capital reserves are created out of capital profits, while revenue reserves come from revenue earnings.
  • c)
    Capital reserves are meant for contingencies, while revenue reserves are for specific liabilities.
  • d)
    Capital reserves increase working capital, while revenue reserves are used for capital investments.
Correct answer is option 'B'. Can you explain this answer?
Most Upvoted Answer
What is the key difference between capital reserves and revenue reserv...
Capital reserves are created out of capital profits of the company, such as premiums on share or debenture issuance and profits prior to incorporation. Revenue reserves, on the other hand, come from revenue earnings and are available for distribution as dividends among shareholders.
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What is the key difference between capital reserves and revenue reserves?a)Capital reserves can be distributed as dividends, while revenue reserves cannot.b)Capital reserves are created out of capital profits, while revenue reserves come from revenue earnings.c)Capital reserves are meant for contingencies, while revenue reserves are for specific liabilities.d)Capital reserves increase working capital, while revenue reserves are used for capital investments.Correct answer is option 'B'. Can you explain this answer?
Question Description
What is the key difference between capital reserves and revenue reserves?a)Capital reserves can be distributed as dividends, while revenue reserves cannot.b)Capital reserves are created out of capital profits, while revenue reserves come from revenue earnings.c)Capital reserves are meant for contingencies, while revenue reserves are for specific liabilities.d)Capital reserves increase working capital, while revenue reserves are used for capital investments.Correct answer is option 'B'. Can you explain this answer? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about What is the key difference between capital reserves and revenue reserves?a)Capital reserves can be distributed as dividends, while revenue reserves cannot.b)Capital reserves are created out of capital profits, while revenue reserves come from revenue earnings.c)Capital reserves are meant for contingencies, while revenue reserves are for specific liabilities.d)Capital reserves increase working capital, while revenue reserves are used for capital investments.Correct answer is option 'B'. Can you explain this answer? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What is the key difference between capital reserves and revenue reserves?a)Capital reserves can be distributed as dividends, while revenue reserves cannot.b)Capital reserves are created out of capital profits, while revenue reserves come from revenue earnings.c)Capital reserves are meant for contingencies, while revenue reserves are for specific liabilities.d)Capital reserves increase working capital, while revenue reserves are used for capital investments.Correct answer is option 'B'. Can you explain this answer?.
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