Which of the following items are included under Reserve and Surplus :

(A) Security Premium reserve

(B) Revaluation reserve

(C) Share option outstanding account

(D) Reserve Capital

Choose the correct answer from the options given below:

Under the Companies Act and Schedule III provisions, Reserves and Surplus is shown under Shareholders' Funds in the balance sheet.

Let's examine each item:

(A) Security Premium Reserve - Created when shares are issued at a premium (above face value). This amount is shown under Reserves and Surplus. ✓

(B) Revaluation Reserve - Created when fixed assets are revalued upwards, resulting in an increase in their book value. This reserve is shown under Reserves and Surplus. ✓

(C) Share Option Outstanding Account - This represents amounts received from employees for share options granted under Employee Stock Option Plans (ESOP). Until the options are exercised, this amount is shown under Reserves and Surplus. ✓

(D) Reserve Capital - This is the part of uncalled capital that can only be called upon during the winding up of the company. Reserve Capital is not shown in the balance sheet as it has never been called up. It is only disclosed as a note to accounts. It is not part of Reserves and Surplus. ✗

Therefore, items (A), (B) and (C) are included under Reserves and Surplus, while (D) is not.

Correct Answer: Option 1