Question

what is the purpose of shortworking reserve account?​

Answer 1

Answer:

The amount in such reserve can be used to pay off the due royalty or can be used to dispose off future royalty payments. Short working is the difference between actual royalty and minimum rent . It can be said that if minimum rent exceeds the amount of actual royalty,it is the redeemable dead rent i.e short working

Answer 2

Answer:

Shortworking is the amount by which the actual royalty is exceeded by minimum rent. Therefore, whenever the minimum rent rises over the actual royalty it is known as redeemable dead rent or shortworking. It is also known as royalty suspensor. Royalty reserves refer to the payment that is due as per the contract.

Explanation:

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