Concept:Retained profits are accumulated trading profits kept inside a business rather than paid out as dividends.
Explanation:Retained profits come from the normal operating activities of a company.
These profits are not distributed to shareholders as dividends.
Instead, they are ploughed back to finance expansion, replace assets, or strengthen working capital.
Because they arise from regular revenue profits, they belong to the category of revenue reserves.
They are not capital reserves, which arise from non-trading sources such as share premium or revaluation surplus.
Although a general reserve is also a revenue reserve, retained profits specifically mean the undistributed profit balance carried forward.
The key classification for retained profits is therefore revenue reserve.
Answer:A. Revenue reserve