Accounting · Reserves and Provisions
Which of the following statements is true regarding reserves?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Secret Reserve is explicitly shown on the assets side of the Balance Sheet.
- 2General Reserve can be used only for one specific predefined purpose.
- 3Dividend Equalization Reserve is an example of a Specific Revenue Reserve.✓
- 4Capital Reserve is normally created out of free or revenue profits.
Correct answer
Dividend Equalization Reserve is an example of a Specific Revenue Reserve.
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