Revenue Reserves Identification

Steps:

• Recall revenue reserves arise from profits, like retained earnings or general reserves.
• Identify options: Assume 1 is retained earnings (profit-based), 2 is general reserve (from profits), 3 is capital redemption reserve (capital-based), 4 is share premium (capital-based).
• Match: Revenue reserves are those from revenue profits, so 1 and 2 qualify.
• Select pair: A combines the two revenue types.

Why A is correct:

• Revenue reserves are appropriations of profits per accounting standards (e.g., IAS 1), matching 1 (retained earnings) and 2 (general reserve).

Why the others are wrong:

• B includes 3, a capital reserve from share buybacks, not profits.
• C includes 4, share premium as capital reserve from issuance, not revenue.
• D pairs two capital reserves, excluding profit-based ones.

Not enough information on exact labels of 1–4 for full certainty.

Final answer: A