Profit and loss a/c
General Reserve a/c
Special Reserve a/c
Capital reserve a/c
Answer is Right!
Answer is Wrong!
The correct answer is D. Capital reserve a/c.
A capital reserve is a reserve that is created from the profits of a company. It is not available for distribution to shareholders as dividends, but can be used to finance future capital expenditure or to write off losses.
A profit prior to incorporation is a profit that is made by a company before it is incorporated. This profit is not available for distribution to shareholders as dividends, but must be transferred to a capital reserve account.
The other options are incorrect because:
- A profit and loss account is a financial statement that shows the income and expenses of a company for a period of time. It is not used to record capital reserves.
- A general reserve is a reserve that is created from the profits of a company and is available for distribution to shareholders as dividends.
- A special reserve is a reserve that is created from the profits of a company for a specific purpose, such as to fund a future capital expenditure or to write off losses.