GK
BUSINESS ECONOMICS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
A charge of estimated expenses
|
|
|
An appropriation of profit for a specific purpose
|
|
|
The distribution of profits to shareholders
|
|
|
The amount of net income left over for the business after it has paid out dividends to its shareholders.
|
Detailed explanation-1: -What is a Reserve? A reserve is an appropriation of profits for a specific purpose. The most common reserve is a capital reserve, where funds are set aside to purchase fixed assets. By setting aside a reserve, the board of directors is segregating funds from the general operating usage of the company.
Detailed explanation-2: -It is known as specific reserve. A specific reserve is one, which is created for some specific purpose by debiting profit and loss appropriation account. It is available for the purpose for which it is created.
Detailed explanation-3: -Appropriation. Charge against profit means the deduction of any amount from the firm’s revenue to reach Net Profit or Loss. Appropriation of Profit is the distribution of Profit. Hence, the Profit and Loss Account is prepared. Hence, the Profit and Loss Appropriation Account is prepared.