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
Correct Answer: Compensation received on the termination of the contract
Solution : Answer = Compensation received on the termination of the contract
Compensation received on the termination of the contract is not a part of capital nature profit. Capital nature is the accumulated cumulation of profit of capital nature. Capital profits typically involve gains related to the company's capital structure or assets. While profit before incorporation, profit from the sale of fixed assets, and premium on share issuance are capital profits, Compensation received on contract termination is considered revenue or income, not directly related to the company's capital, making it the correct choice.
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
Question : Which of the following represents an external source of finance?
Option 1: Retained earnings
Option 2: Trade credit
Option 3: Issue of bonus shares
Option 4: Sale of fixed assets
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