6. Mr. D, an Articled Clerk, was performing audit procedures related to Reserves and Surplus in PQ Ltd. tell him that which statement are correct in respect of Reserves and Surplus? (I) Reserves are the amounts appropriated out of profits for commitment. (II) Securities premium is a capital reserve. (III) A debit balance in the statement of profit and loss account shall be shown as a negative figure under the head 'surplus'. (IV) All reserves can be used to augment the working capital of the Company.
Options
AI & II above
BII & III above
CIII & IV above
DII & IV above
(2 Marks)
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