Answer Posted / prasanna11149@yahoo.co.in

Reserve is the part of the capital of a company, other than
the share capital, largely arising from retained profit or
from the issue of share capital at more than its nominal
value. Reserves are distinguished from Provision in that
for the latter there is a known diminution in value of an
asset or a known liability, whereas reserves are surpluses
not yet distributed and, in some cases (e.g., share premium
account or capital redemption reserve), not distributable.
The directors of a company may choose to earmark part of
these funds for a special purpose.(e.g., a Reserve for
obsolescence of plant). However, reserves should not be
seen as specific sums of money put aside for special
purposes as they are represented by the general net assets
of the company. Reserves are subdivided into Retained
earnings(revenue reserves), which are available to be
distributed to the shareholders by way of dividends, and
capital reserves, which for various reasons are not
distributable as dividends, although they may be converted
into permanent share capital by way of a bonus issue.

Provision is an amount set aside out of profits in the
accounts of an organisation for a known liability(even
though the specific amount might not be known) or for the
diminution in value of an asset. Common examples include
Provision for Bad debts, Provision for depreciation and
also provision for accrued liabilities.

Reserve and Provision may be shown on the Liabilities side
of the Balance sheet or it may be deducted from the
concerned asset on the assets side of the balance sheet
(like Provision for bad debts deducted from Debtors)

What Settlement details are required on the delivery instruction slip?

4884

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Expand---------DEP

2010

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Can anyone give comparative data of NPA(non performing assets) of nationalised banks or BANKS IN INDIA for the last 5-10 years if possible with bifurcation substandard doubtful loss asset

2226

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Q A project cost Rs.6,00,000. It yields annually a profit of Rs.80,000. After depreciation of 12.5% p.a.but before tax of 50%.Calculate payback priod.

2383

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EXPAND___________INMA

2018

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what salary you expect???

2183

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outstanding expenses, prepaid or unexpired expenses

4051

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What are the names of the codes which are needed for RTGS ? Payment and wire transfer respectively ?

1851

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Expand----------SAMC

2141

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What are the legal entities that constitute your business? Does a legal entity have a seperate Federal Tax Id? In which country does a legal entity operate? In which currency does a legal entity operate? When does each legal entity's fiscal year begin?

2178

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Short Answer on __________Trade

1956

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what is CDD’s configuration

2367

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What is re-financing in Letter of Credit settlement

2083

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What is Spin-off & spilts

2075

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The following Trial Balance was extracted from the books of Chetan.Do you think that it is correct? If not,rewrite it in the correct form. Debits Rs Credits Rs ------------------------------------------------------------ Stock |8250 | Capital |10000 Purchases |12750 | Sales |15900 Returns outward |700 |Returns inwards |1590 Discount received|800 |Discount allowed |800 Wages & salaries |2500 |Scooty |1750 Rent and rates |1850 |Carriage charges |700 Sundry debtors |7600 |Sundry Creditors |7250 Bank Overdraft |2450 |Bills payable |690

7562

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