Question

The portion of the share capital which cannot be called up except on the winding up is known as _______________.

• A. Called up capital
• B. Paid-up capital
• C. Authorized capital
• D. Reserve capital

Answer 1

Answer: (D)

Reserve capital

Reserve capital is that part of the share capital which is yet to be called by the company. It is that part of the authorised capital which can be called by the company, and is usually called upon on the winding up of the company. Reserve capital is not disclosed in the books of account.