Which statements are correct about capital reserve?(A) It is necessary to create capital reserves out of capital profits, if any.
(B) It cannot be used to issue bonus shares.
(C) It can be used to write off capital losses or to issue bonus shares any time during the lifetime of the company.
(D) It is not shown on the company balance sheet.Choose the correct answer from the options given below:

Let's analyze the statements based on standard accounting rules:Statement (A) is correct: Capital profits (like profit on forfeiture of shares, profit prior to incorporation) must be moved into a Capital Reserve.Statement (C) is correct: Capital reserves are specifically utilized to write off capital losses or can be deployed for issuing fully paid-up bonus shares subject to regular provisions.Statement (B) is incorrect because it says it cannot be used for bonus shares.Statement (D) is incorrect because it is mandatory to display Capital Reserve inside the Balance Sheet under the main heading 'Reserves and Surplus'.Therefore, options (A) and (C) are correct.