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InterviewSolution
| 1. |
Distinguish between revenue reserve and capital reserve? |
| Answer» \tCapital ReserveRevenue ReserveDefinitionA capital reserve is created to finance long term projects for a businessRevenue reserve is created to meet unforeseen events in a business organisationReserve SourceTo meet the specific purpose of meeting the accounting principlesTo be used as reinvestment for companyTenureCan be used for long term projectsCan be used for short term purposeFor dividend payoutCannot be distributed as dividendCan be used for dividend payoutExampleCapital reserve is created by the sale of fixed assetsRevenue reserve is created from retained earnings\t | |