Which Statement Relating to Reserves Is Not True

question 34

Multiple Choice

Which statement relating to reserves is not true?

• A) They represent items of equity other than share capital.
• B) They represent cash set aside to be drawn on in hard times.
• C) Retained earnings is a type of reserve account.
• D) When a non-current asset is revalued upwards a revaluation reserve is created.

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Definitions:

Budget Variance

The difference between budgeted amounts and actual amounts spent or received.

Volume Variance

The difference between the expected volume of production or sales and the actual volume, affecting budgeting and costing.

Overhead Variances

The difference between the actual overhead costs incurred and the standard overhead costs expected for the level of activity.

Critical Part

A component or element within a system or machine that is essential for its operation or performance.