A 'Capital Reserve' can be used for: MCQ with Answer and Explanation

Question

Share Report Error

A 'Capital Reserve' can be used for:

A. Issue of bonus shares

B. Distribution of dividend

C. Writing off revenue losses

D. Payment of salaries

Answer: Option A

Solution (By JKSSB Mock Tests)

Capital reserve, generally, can be used for issuing fully paid bonus shares, not for dividend distribution (except some specific reserves).

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Practice More Accountancy and Book Keeping Questions

Question #1

The financial statement that shows the financial position of an entity at a specific date is:

A. Trading Account

B. Cash Flow Statement

C. Profit & Loss Account

D. Balance Sheet

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Correct Answer: Option D

Explanation:
Balance Sheet is a statement of assets and liabilities as on a specific date, showing financial position.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

The 'MAT credit' can be carried forward for:

A. 8 years

B. Indefinite

C. 5 years

D. 15 years

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Correct Answer: Option D

Explanation:
MAT credit can be carried forward for 15 assessment years.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

The 'Payment of Bonus Act, 1965' is applicable to:

A. All employees

B. Employees drawing wages up to ₹21,000 per month

C. Only government employees

D. Only private sector

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Correct Answer: Option B

Explanation:
The Act applies to employees with wages ≤ ₹21,000 per month (threshold may vary with amendments).

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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