Capital Reserve Explained | Meaning in Accounting 💼🏦

Discover the clear and simple meaning of Capital Reserve in accounting! 📘✨

A capital reserve is created from capital profits, not from normal business operations. 🏦💰 These profits may come from the sale of fixed assets, issue of shares at premium, profit on revaluation, or redemption of debentures. 📈📊 Capital reserves are not used for day-to-day expenses. Instead, they are used for special purposes, such as writing off capital losses, issuing bonus shares, or strengthening the financial position of the business. 💡🔒

Perfect for commerce students, exam preparation, and accounting beginners! 🎓📚

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