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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 Reserve
A 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 Reserve
A 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
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What is consolidated reserve?
consolidated revenue reserve
When was Revenue Equalization Reserve Fund created?
Revenue Equalization Reserve Fund was created in 1956.
Difference between net income and revenue?
Revenue is all the money a business brings in. Net income is revenue minus all the expenses of the business. Net income is profit.
What is net Interest?
Net Interest refers to the revenue that is got from the difference between cost of servicing liabilities and the revenue generated by assets that bear interest. This considered to be an excess revenue.
What is the Difference between a general obligation bond and revenue bond?
General Obligation Bonds (GO Bonds): Backed by the general taxing power of the issuing government, considered lower risk, used for a variety of public projects, and often require voter approval. Revenue Bonds: Backed by revenue from specific projects, considered higher risk, used for specific revenue-generating projects, and typically do not require voter approval. Understanding the differences between these bonds is crucial for investors and municipalities alike, as it influences the risk, return, and legal requirements associated with financing public projects.
What are the examples of revenue reserves?
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.
What are the example of Revenues?
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.
What is revenue reserve and its example?
The revenue reserve is the retained earnings which are shown in the company's balance sheet as part of the shareholders' funds and are set aside to use to continue to pay dividends even if the company makes a loss. The example of the revenue reserve are the credit balance of the Profit and Loss Account, General Reserve and etc...
What is the difference between a revenue center and a support center?
what is the difference between revenue center and suport center
Is revenue reserve a free reserve?
no
What is the difference between Cost of revenue and revenue?
m mnmk
In accounting profit is the difference between what?
difference between revenue and costs
What is consolidated reserve?
consolidated revenue reserve
When was Revenue Equalization Reserve Fund created?
Revenue Equalization Reserve Fund was created in 1956.
The difference between revenue from sales and cost of goods sold?
Difference between revenue from sales and cost of goods sold is called "Gross profit".
What is the difference between retained earnings and revenue reserve?
Capital reserve is capital set aside for specific future purpose such as building a new facility in the near future. It would be like you saving to buy a new a car. Reserve capital is money set aside for unforeseen issues. It's like a saving account or emergency fund that has no specific earmark.
The difference between turnover and revenue?
In U.K. "turnover" is what U.S. calls "revenue"
