Your cart is empty.
Practice each question, then open the answer or worked solution.
Give four examples each of revenue reserve and capital reserves.
Revenue reserve examples are as follows:
Capital reserve examples are as follows:
Distinguish between general reserve and specific reserve.
| Basis of Comparison | General Reserve | Specific Reserve |
| Meaning | A reserve created without any specific purpose | Reserve created with a specific purpose |
| Uses | Can be utilized for whichever purpose necessary for business | It needs to be used only for the purpose it is created |
| Some examples | Fund reserves, retained earnings | Dividend equalisation reserve, Debenture redemption reserve, etc. |
Explain the concept of secret reserve.
An amount that leads to undervaluing of the assets of an organization or overestimation of liabilities is called a secret reserve. It is formed with the purpose of hiding business profits from competitive organizations or competitors.