Question

what is reserves


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Answer 1

Reserves is a concept which is important for organisation as well as corporate companies. Reserves help to organization to meet there expenses it's like reedemption of debenture, reedemption of share ect. Resevers use for meet liability or creditors.

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Answer 2

In financial accounting, "reserve" always has a credit balance and can refer to a part of shareholders' equity, a liability [Reserve for Claims better called Liability for Estimated Claims], or an asset contra account [Reserve of Uncollectible Accounts, better called Allowance for Uncollectible Accounts].