Question

In a partnership the reserve is created to prevent the understate of the net profit , true or false with reasons pls.​

Answer 1

Answer:

True because the pantership is the reserve is. created to prevent the understanding

Answer 2

Answer:

False

Explanation:

Since reserves are neither expenses nor losses, so these are not charged to profit & loss Account rather these are debited to Profit & Loss Appropriation Account which is prepared after Profit and Loss Account.

Creation of reserve does not reduce the net profit but only reduces the divisible profits.

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