Recording

See when the reserve is created out of profits then the profit gets reduced by the amount of such transfer. Actually profit has credit Balance so when it get reduces so it needs to be debited And reserves has credit balance So when u transfer profit from P&l to reserve then balance of reserves gets increased so reserves should be credited

Thanusha Lakshmi

CA Final

★ 3K+

23-Aug-22 20:27

Profit/loss AC Dr. To reserve for Machinery AC

Shankari C

CA Inter

★ 12K+

21-Aug-22 15:28

See When an appropriation for an amount for reserves, record an entry to create the reserve account by debiting retained earnings and crediting the general or specific reserve account. Profit & Loss A/c â?? Dr. To reserve A/c.

Balachandar S

CA Inter

★ 59K+

21-Aug-22 16:42

P&l A/c Dr To reserve A/c

Priyanka R

CA Final

★ 20K+

22-Aug-22 21:19