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What is Capital reserve and Revenue reserve...?
Any example would be highly appreciated.
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Answer Posted / zahra abbas
Capital reserve is a reserve created to deal with general,
unspecified contingencies such as inflation. It is a fund
set aside for the specific purpose and can not be
distributed for other uses. Normally it is legally not
distributable as dividends to shareholders
Revenue reserve on the other hand is distributable to
shareholders as dividends, for example, the profit and loss
account, general reserve.
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