Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:

For whom the Reserve Capital is available at the time of winding up of the company?

Options:

Shareholders

Directors

Creditors

Chairperson of the company

Correct Answer:

Creditors

Explanation:

The correct answer is option 3- Creditors.

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.