31. Differentiate between Capital Reserve and Revenue Reserve.
(any two)
(a)Why there is a need of preparing Financial statements?
(b) Prepare a Purchase Day book of Shiv Stationery from the fol-
lowing information.
Date
Particulars
2018
June 1
June 10
Purchased from Gagan Stationery Marton credit
(a) 70 dozen pencils @ 25 dozen
(b) 10 dozen registers @ 15 per register
Purchased from Amrit Furniture
2 tables @ 1,500 per table.
Purchased 3 dozen ink pots @ '80 per dozen from
Mehar paper Company and received cash discount of 50
Purchased from Rehman Bros. on credit
(a) 5 reams of white paper @ '50 per ream
June 15
June 18
(b) 120 pens @ '60 per dozen.
Less Trade Discount of 10%
8 Marks.
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Answer:
31.The primary difference between revenue reserve and capital reserve is that revenue reserve is the reserve which is created out of the profits of the company generated from its operating activities during a period of time whereas the capital reserve is the reserve which is created out of the profits of the company.
a)The purpose of financial statements. The general purpose of the financial statements is to provide information about the results of operations, financial position, and cash flows of an organization. This information is used by the readers of financial statements to make decisions regarding the allocation of resources.
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