security premium reserve in an example of.....................?
1. revenue reserve
2. Capital reserve
3. reserve capital
4. Revaluation reserve
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The correct answer is option 2.
Securities premium reserve is a type of capital reserve.
This reserve is used to issue fresh shares or debentures at a premium amount.
It is a part of accumulated profits.
Capital reserve is created out of undistributed profits to make the company financially stronger and prepared for future emergencies.
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