[amp_mcq option1=”General reserve” option2=”Capital reserve” option3=”Asset account” option4=”Capital redemption reserve account” correct=”option1″]
The correct answer is: A. General reserve.
A general reserve is a reserve that is not specifically designated for any particular purpose. It is usually used to meet unexpected expenses or to provide a cushion against losses.
A capital reserve is a reserve that is created from the proceeds of a capital issue. It is usually used to finance capital expenditure or to provide a cushion against losses.
An asset account is an account that records the value of an asset.
A capital redemption reserve account is an account that records the amount of money that is set aside to redeem a company’s capital.
Here is a brief explanation of each option:
- General reserve: A general reserve is a reserve that is not specifically designated for any particular purpose. It is usually used to meet unexpected expenses or to provide a cushion against losses.
- Capital reserve: A capital reserve is a reserve that is created from the proceeds of a capital issue. It is usually used to finance capital expenditure or to provide a cushion against losses.
- Asset account: An asset account is an account that records the value of an asset.
- Capital redemption reserve account: A capital redemption reserve account is an account that records the amount of money that is set aside to redeem a company’s capital.