Question

Differentiate between Reserve and surpluses​

Answer 1

Reserves are usually money earmarked by the company for specific purposes. The surplus is where all the profits of the company reside.

Answer 2

Answer:

Reserves are usually money earmarked by the company for specific purposes. The surplus is where all the profits of the company reside.

In accounting terminology Reserve means keeping some amount aside for future activities. It may be for buying an assets or maintaince repairs. Otherwise, for paying bonus or even for legal settlements.

Surplus means an amount or stock whatever it may be leftover after meeting your demand. In simple terms you can say excess of revenue or stocks.