Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Financial Statements of a Company

Question:
The reserve which is created for a particular (specific) purpose and which is a charge against revenue is called?
Options:
Capital Reserve
General Reserve
Secret Reserve
Specific Reserve
Correct Answer:
Specific Reserve
Explanation:
Specific reserves in accounting refers to the reserves that are created for a specific purpose in business. These reserves cannot be used for any other purpose apart from the purpose for which they were created.