Concept:A capital reserve is created from capital profits, which do not arise from normal trading activities.
Share premium is a typical example of a capital profit.
Explanation:When a company issues shares above their nominal value, the extra amount received is called share premium.
This gain is not from ordinary business operations, so it is treated as a capital profit.
Capital profits are transferred to the capital reserve account.
Retained profit is a revenue reserve because it comes from trading profits.
Accumulated depreciation is not a reserve; it is a provision for asset wear and tear.
Loss on forfeited shares is a capital loss, not a capital reserve.
Therefore, among the options given, share premium is the capital reserve of a company.
Answer:C. Share premium