Answers

2014-12-01T16:29:26+05:30
There are two main types of reserves which I am explaining with following way :-

1. Open reserves 

Open reserves may be defined all reserves which shows in the balance sheet. Every person or public can know such reserves of company. Those reserves provide full information to shareholders about which amount has gone to reserves or why they are not getting all amount of dividend. This type can also divide in sub parts.

A)Capital reserves are main type of open reserves. It is not created out of profit of company. This reserve is not used for distributing the dividend to shareholders of company.

 B)Revenue reserves are that part of open reserves which are created out of profit of company. It is showed in profit and loss appropriation account .It can be used for dividend to shareholders


2)Secret reserves may be defined as that type of reserves which is not shown in final account of company. Means it has neither been shown in profit and loss appropriation account nor in balance sheet. These reserves can easy created by showing less value of assets and more value of liabilities in balance sheet. If a company has created such secret reserves for the benefits of company, it will be surely strong his financial position. :)
1 5 1
2014-12-01T16:43:22+05:30
There are two main types of reserves which I am explaining with following way :-
2)Secret reserves may be defined as that type of reserves which is not shown in final account of company. Means it has neither been shown in profit and loss appropriation account nor in balance sheet. These reserves can easy created by showing less value of assets and more value of liabilities in balance sheet. If a company has created such secret reserves for the benefits of company, it will be surely strong his financial position. :)
0