Recording Reserves

Q.

Name and explain different types of reserves in details.

Q.

Give four examples each of 'revenue reserve' and 'capital reserve'.

Q.

Explain the purpose of creating provisions.

Q.

Revenue reserve is a reserve created out of ______

1. Profits

2. Capital

3. Abnormal incomes

4. None of the above

Q.

What is the cost depletion method?

Q.

________ is a charge against profits

1. Reserve

2. Provision

3. Both A & B

4. Capital

Q. What is meant by Reserve?

Q.

Distinguish between 'revenue reserve' and 'capital reserve'.

Q.

Mr. Rohan started a business of chit funds. He collected 10 Crores from small investors with an assured 5 times return in next 5 years. He suddenly closed the company and ran away. Which value is not followed by Mr. Rohan and what legal remedy is available to the small investors?

Q. Revenue reserves are also known as ___________.

1. Free Reserves
2. Non Free Reserves
3. Owners reserves
4. None

Q.

What type of reserve is provision?

Q. Capital Reserve is created out of_____________.

1. Capital profit
2. Revenue profit
3. Capital receipt
4. Revenue receipt

Q. A reserve is a ______________ against Profits.

1. Appropriation
2. Added
3. Charge
4. Deducted

Q. Secret reserves are created by means of:

1. Overvaluation of inventories
2. Providing excessive depreciation
3. Undervaluation of liabilities
4. Transfer to general reserve

Q.

A reserve is part of _____ that have been appropriated for a particular purpose.

1. Bad debts

2. Profits

3. Taxation

4. Assets

Q. Reserves arising from capital receipts are known as _________.

1. Capital Reserves
2. Reserve Fund
3. Secret Reserve
4. General Reserve

Q. A provision is a ___________.

1. General reserve
2. Capital reserve
3. None of these
4. Specific reserve

Q. Creation of reserve reduces taxable profits of the business.

1. True
2. False

Q. _________ is a secret reserve usually created to, provide for the lose by way of fluctuation in the value of investment.

1. Investment Fluctuation Reserve
2. Foreign Exchange Fluctuation Fund
3. General Reserve
4. Capital Reserve

Q. Distinguish between 'Revenue reserve' and 'Capital reserve'.

Q. ________ can be freely utilised by the management for any purpose.

1. General Reserve
2. Reserve Fund
3. Revenue Reserve
4. None