Which of the following cannot be used for the purpose of creation of capital redemption reserve account?

Question

Quizplus · Accepted Answer

The capital redemption reserve account is created when a company buys back its own shares and it is a requirement under company law in many jurisdictions. This reserve is usually funded by profits or other reserves that a company has, such as the profit and loss account (credit balance), general reserve account, or dividend equalization reserve account. However, unclaimed dividends account cannot be used for this purpose because this account represents funds that are owed to shareholders as dividends but have not yet been claimed. These funds are still considered to be liabilities of the company until they are claimed or until the claim period expires. Therefore, they cannot be used to fund the capital redemption reserve, which is an equity account.

Which of the Following Cannot Be Used for the Purpose