WHAT IS THE DIFFERENCE BETWEEN RESERVE CAPITAL AND CAPITAL
RESERVE?
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Answer Posted / deepak sharma
Reserve capital is the capital which can be called only at
the time of liquidation of company or for the purpose of
liquidation.
Capital reserve is a reserve which is not free for
distribution as dividend.
| Is This Answer Correct ? | 4 Yes | 5 No |
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AT THE TIME OF REDEMPTION OF DEBENTURES. WHEN THERE IS PROFIT/LOSS ON SALE OF DEBENTURES WE TRANSFER THAT AMOUNT IN PROFIT AND LOSS A/C BUT WHEN WE CANCEL OUR DEBENTURES AFTER BUYING IT FROM OPEN MARKET THE DIFFERENCE BETWEEN MARKET VALUE AND COST OF DEBENTURES TRANSFER TO "CAPITAL RESERVE ACCOUNT .. WHY SO ANY PRACTICAL ANSWER ??
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