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JAMB Principles of Accounts 2013 Question 43

Question 43

Company Accounts

Which of the following is the capital reserve of a company?

  1. A.Share premium.
  2. B.Retained profit.
  3. C.Accumulated depreciation.
  4. D.Loss on forfeited shares.
Show the answer and explanation

Answer: A (Share premium.)

Explanation

Share premium cannot be paid out as dividend, so it is a capital reserve; retained profit is a revenue reserve.