A reserve is an amount

Assessment: WAEC SSCE - Financial Accounting - 2000 (Objective) Subject: Financial Accounting

Question 1 Report

A reserve is an amount
Answer Details
A reserve is an amount set aside from profits by a company to be used for a specific purpose. It is not paid to creditors or for paying dividends. Rather, it is kept as a contingency or for future use. Reserves can be used to fund expansions, acquisitions, or other investments, or to cover unexpected expenses. Therefore, the correct option is "set out of profit for future use".
Read lesson note on Accounts Of Not-for-profit Making Organizations (WAEC)
Read lesson note on Provisions And Reserves (WAEC)
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