How is capital revenue created?

In above question mentioned as Capital Revenue,

So if you think it means

1. Capital Profit then the Items of capital profit out of which capital reserve is created from:

* Profit on revaluation of assets and liabilities.

* Profit on sale of assets

* Profit on sale of shares and debentures

* Profit on forfeiture of shares

* profit on redemption of debentures

* profit on purchasing running business

2. Revenue reserve is created out of the revenue profit earned in the normal course of the business. It refers to the undistributed revenue profit. It can be distributed as dividend to the shareholders. Revenue reserve helps to strengthen the financial position of the company and also helps to declare uniform rate of dividend.

Items relating to revenue reserve

* General reserve

* Dividend equalization fund

* Sinking fund

* Research and development fund