Accountancy, asked by priya199878, 9 months ago

5."Creation of reserves is discretionary".


True


False​

Answers

Answered by smee26
2

Creation of Discretionary Reserves

However, Council does in some instances create Discretionary Reserves where: It is anticipated that extensive works will require funding over a period of time; • Funds are collected specifically for funding of capital works; and • There is a legal or legislative requirement.

true

Answered by kush193874
22

Answer:

true

Explanation:

Creation of reserves is discretionary. It can be created only if adequate profits have been earned. The object is to provide for depreciation, doubtful debts and other specific liabilities. The object of reserves is to strengthen the financial position of the business.

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