How is profit prior to in corporation treated as?
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Hence, Profit prior to incorporation is treated as Capital Reserve.
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A capital reserve is a type of account on a municipality's or company's balance sheet that is reserved for long-term capital investment projects or other large and anticipated expenses that will incurred in the future.
Profit prior to incorporation is the profit earned or loss suffered during the period before incorporation. It is not legally available for distribution as dividend because a company cannot earn a profit before it comes into existence
Hence, Profit prior to incorporation is treated as Capital Reserve.
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