Correct Answer
✅ Option D — Correct Option
All Options:
- AReserve and Surplus-Securities premium 90 lakhs; others ` 110 lakh and Accumulated loss ` 280 lakhs in the Asset side.
- BReserve and Surplus ` 200 lakhs; and Accumulated loss ` 280 lakhs in the Asset side.
- CReserve and Surplus - ` 200 lakhs only (D Reserve and Surplus - ` 80 lakhs only
- D ✓
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Detailed Solution & Explanation
1. The debit balance of the Statement of Profit and Loss (accumulated loss of lakhs) should be disclosed as a negative figure under the head 'Reserves and Surplus'.
2. Total of other reserves = Securities Premium (90) + Capital Reserve (40) + Revaluation Reserve (70) = lakhs.
3. Net Reserves and Surplus = lakhs (disclosed as a negative amount on the face of the Balance Sheet).
Hence, **Option D** is the correct answer.
Key Concepts to Understand
Balance Sheet
A statement showing the financial position of a business at a particular date, listing all assets on one side and all liabilities and capital on the other side. It is not an account but a statement.
Reserves and Surplus
Accumulated profits and specific provisions retained in the business rather than distributed to shareholders. Reserves are appropriations of profit (General Reserve, Capital Reserve), while Surplus is the undistributed balance in the P&L Account.
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