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JAMB Principles of Accounts 1998 Question 43

Question 43

Company Accounts

The part of equity which is payable on winding up is called

  1. A.general reserve
  2. B.revenue reserve
  3. C.capital reserve
  4. D.normal reserve.
Show the answer and explanation

Answer: C (capital reserve)

Explanation

Capital reserves cannot be distributed as dividends, so they reach members only when the company is wound up.