Accountancy Part AAccounting for Shares

Identify the true statement in respect of Reserve Capital.

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → It is a portion of uncalled share capital and can be called only in the event of winding up of a company.

NCERT (2026-27 edition):
Reserve Capital – “… A company may reserve a portion of its uncalled capital to be called only in the event of winding up of the company. Such uncalled amount is called ‘Reserve Capital’ of the company. It is available only for the creditors on winding up of the company.”