7. The directors of a limited company increased the general reserve. Which item decreased?
1Balance at bank
2Ordinary share capital
3Preference share capital
4Retained earnings
Answers
Answer:
The answer is retained earni gs
Answer:
The correct answer to this question is Retained earnings.
Explanation:
Given - The directors of a limited company increased the general reserve.
To Find - Which item decreased when the directors of a limited company increased the general reserve?
Retained earnings decreased when the directors of a limited company increased the general reserve.
The term "general reserve" refers to the amount of profit set aside by the company as reserves, or we can say that these are the company's earnings that the company wishes to set aside for meeting future uncertainties, where future uncertainties include meeting contingencies, paying dividends, increasing working capital, offsetting future losses, strengthening liquid resources, etc.
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