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:

Raw Materials

Basic materials used in the production process to create goods and products.

Finished Product

A completed item ready for sale, having undergone all stages of manufacturing and preparation.

Organizing

The process of arranging or structuring resources and tasks to achieve objectives efficiently, often relating to business or project management.

Directing

The process of guiding, leading, and motivating employees to achieve organizational goals.