Revenue reserve is created out of revenue Profit . It is created out of Revenue Profit for exaple General Reserve, Dividend equalization reserve, Investment fluctuation reserve etc.
Reserves always created from profit. Therefore the Journal entry will be for creating reserves Dr Profit & Loss A/c CR Reserve A/c
Depreciation is the allocation of the portion of assets value to fiscal year in which it is used it is charged to profit and loss account because it is that portion of asset value which is expensed and expenses are shown in profit and loss account.
Provision of depreciation is allowance account in which every year fixed amount is put to charged against actual depreciation so that planned income statement can be prepared and profit remains smooth.
Unrealized profit is that portion of profit which is not yet earned. In transfer pricing normally what happens that products after finishing transfers to other departments with profit charged but if those goods not sell to end user until that time that profit cannot be counted as profit which is called unrealized profit.
no.it is not charged against profit
Reserve is a an amount set aside from the profit when it is calculated. On the other hand provision is an amount charged against profit and loss in order to assist in calculating the accurate profit.
Provisions are charge against profit and Reserves are appropriation of profit.
Revenue reserve is created out of revenue Profit . It is created out of Revenue Profit for exaple General Reserve, Dividend equalization reserve, Investment fluctuation reserve etc.
Revenue reserve is created out of revenue Profit . It is created out of Revenue Profit for exaple General Reserve, Dividend equalization reserve, Investment fluctuation reserve etc.
A bad debt is a expense which affects the owners equity as it is charged against the profit and loss account and it decreases the profit of the business.
how can we increase the general reserve
Reserves always created from profit. Therefore the Journal entry will be for creating reserves Dr Profit & Loss A/c CR Reserve A/c
A reserve which is created out of the revenue profit is called revenue reserve. Revenue profit is earned in the normal course of the business. Revenue reserve refers to the undistributed revenue profit. It is created for strengthening the financial position, replacing deprecialble assets, redeeming liabilities, declaring uniform rate of dividend and conducting research and development functions. If the reserve is not needed in the future, it can be distributed as dividend to the shareholders.There are two types of revenue reserve:a) General ReserveA reserve which is created out of the profit not for a specific purpose is known as general reserve.General reserve is used for general purpose as per the discretion of the management. Usually, general reserve is used for strengthening the financial position and meeting future contingencies and losses.b) Specific ReserveA reserve which is created out of the profit for a particular purpose is known as specific reserve. Such reserve can not be utilized for any purpose other than specified. Specific reserve is created by debiting the profit and loss appropriation account. It can be invested in outside securities. It serves for a specific purpose as to equalize dividend or to redeem a fixed liability or to replace a fixed assets or to conduct a research and development work.The following are the important types of specific reserve:* Dividend equalization fund* Sinking fund* Research and development fund
Depreciation is the allocation of the portion of assets value to fiscal year in which it is used it is charged to profit and loss account because it is that portion of asset value which is expensed and expenses are shown in profit and loss account.
return is calculate against investment. profit is calculte against cost.
THE REVENUE RESERVE IS THAT PART OF PROFIT THAT HAS BEEN NOT GIVEN TO THE SHAREHOLDER BUT RETAINED IN THE BUSINESS FOR FURTHER GROWTH. HENCE REVENUE RESERVE AS PAR DEFINATION IS THE PART OF THE PROFITS RETAINED IN THE BUSINESS. == ==