Question

*The reserve is made:*

1️⃣ To face future uncertainties
2️⃣ To reduce the profit
3️⃣ To show the actual financial position
4️⃣ To know the actual profit or loss​

Answer 1

Answer:

Another common term which finds a place in the balance sheet of a firm is reserves. The amount of reserves is a very important component in the financial statements. This is because, any amount which is kept aside in reserves, brings down the amount of profits of the firms. Thus, the study of reserves and how they are created, are pertinent to the understanding of accounting terms. Let us get to know what is a reserve.

Explanation: