Question : ______________is transferred of the Capital Reserve.
Option 1: Profit from sale of fixed assets
Option 2: Premium on issue of shares
Option 3: Profit on forfeiture of shares
Option 4: All of the above
Correct Answer: All of the above
Solution : Answer = All of the above.
Capital reserves are created out of profits earned by the company. Profit from the sale of fixed assets, premium on the issue of shares, and profit on the forfeiture of shares are all examples of profits that can be transferred to capital reserves. Hence, the correct option is 4.
Question : Which of the following is not a capital profit?
Option 1: Profit prior to incorporation of the company
Option 2: Profit from the sale of fixed Assets
Option 3: Premium on issue of shares
Option 4: Compensation received on the termination of the contract
Question : ----------------- is a fund earmarked for investment in fixed assets or already invested in fixed assets. An example of a Fixed Assets Fund is a Building Fund & Amount invested in fixed assets during the year is transferred to a Capital Fund.
Option 1: Capital fund
Option 2: Fixed assets fund
Option 3: Endowment Fund
Option 4: None of the above
Question : In case debentures of Rs 2,00,000 redeemable at a premium were purchased from the open market at below the nominal value. Gain on cancellation is transferred to
Option 1: General reserve
Option 2: Capital reserve
Option 3: Capital redemption reserve
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