A-LevelAccountingPreparation of financial statements9706/12 · Feb/Mar 2018 · Q141 Mark

Which statements describe a capital reserve? 1 It is a reserve arising from a gain which is not yet realised. 2 It is a reserve created by transferring an amount from profit for the year. 3 It is a reserve which can be credited back to retained earnings if not used.

A1, 2 and 3

B1 and 2 only

C1 only

D2 and 3 only

✓ Correct answer

C: 1 only

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Topic: Preparation of financial statements, A-Level Accounting (syllabus 9706). Multiple choice, 1 mark.
Source: A-Level Accounting, Feb/Mar 2018 Paper 1 Variant 2, question 14.

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