The opening and closing balance of general reserves are Rs 10 000 and Rs 9 000 respectively It is st...........

General Accounting Principles Fund flow statement

The opening and closing balance of general reserves are Rs 10,000 and Rs 9,000, respectively. It is stated in addition information that a loss of Rs 1000 has been written off in general reserves. In such a case, decline in reserve and loss on investment will be adjusted in P&L account.

True

False

partly true partly false

None of the above

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Explanation:

Transfer to General Reserve is excluded while preparing Funds Flow Statement on the ground that it do not affect working capital as its non- current items which do not affect the Flows of funds. but its is adjusted in p/l a/c so this statement is partly true and partly wrong.