how will you classify the reserve in accounts? answer please
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Explanation:
A reserve is a retained earnings secured by a company to strengthen a company’s financial position, clear debt & credits, buy fixed assets, company expansion, legal requirements, investment and other plans. These are usually done to save the cash from being used in other purposes. Reserve funds do not have any legal restrictions so that the company can use it for any purpose.
Types of Reserves:
Reserves are divided into two types:
Revenue Reserves
Capital Reserves
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