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      Question

      Which one of the following statements is

      correct?
      A Capital reserves Capital reserves are normally created out of free or distributable profits. Correct Answer Incorrect Answer
      B Dividend equalization reserve is an example of general reserve. Correct Answer Incorrect Answer
      C General reserve can be used only for some specific purposes. Correct Answer Incorrect Answer
      D Provision' is a charge against profit. Correct Answer Incorrect Answer

      Solution

      The correct answer is A

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