Distinguish between capital reserves and revenue reserves?

Capital reserves are funds that are set aside by a company from its profits to be used for specific purposes such as expansion, acquisitions, or investments. These reserves cannot be distributed as dividends to shareholders and are considered as part of the company's capital.

Revenue reserves, on the other hand, are funds that are set aside from the profits of a company to be used for general business purposes or to cover future expenses. These reserves can be distributed as dividends to shareholders if the company's board of directors decides to do so.

In summary, capital reserves are set aside for specific purposes and cannot be distributed as dividends, while revenue reserves are more general and can be used for various business needs or distributed to shareholders.