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difference between Reserve capital and capital reserve
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Answer / dharmendra jha
Reserve capital if that part of reserve which may use on
the event of winding off the company .... but capital
Reserve is a part of profit..........
| Is This Answer Correct ? | 76 Yes | 6 No |
Answer / geethamruth
As per Companies Act 1956,
1.Reserve capital refers to that part of share capital which can be called only at the time of winding up of the company.this is created in-order to provide greater security to the outside creditors against the risk of non-availability of cash to them for satisfaction of their claims.
2.On the other hand Capital reserve means profits which cannot be distributed as dividend because they arised on capital items.Ex:balance in share forfeiture account after setting off discount on reissue of shares when all shares forfeited are reissued
NOTE:AS PER COMPANIES ACT 1956,CAPITAL PROFITS RECEIVED IN CASH CAN BE DISTRIBUTED AS DIVIDEND
| Is This Answer Correct ? | 26 Yes | 3 No |
Answer / rajesh
the term reserve capital which is not called except in the
case of winding up
whereas capital reserve is a reserve which is a raised from
sale of fixed asset
| Is This Answer Correct ? | 29 Yes | 16 No |
Answer / indira
RESERVE CAPITAL IS THE UNCALLED CAPITAL WHICH THE
SHAREHOLDERS CANNOT BE CALLED UPON TO PAY UNLESS THE
COMPANY GOES INTO LIQUIDATION.
CAPITAL RESERVE IS CREATED OUT OF PROFITS OF A CAPITAL
NATURE.EG;PREMIUMS RECEIVED ON THE ISSUE OF SHARES AND
DEBENTURES,SELLING A FIXED ASSET AT A HIGHER PRICE THAN ITS
BOOK VALUE etc
| Is This Answer Correct ? | 2 Yes | 1 No |
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