Reserves are usually divisible into two kinds – specific and general reserves. These again may be classified as either revenue reserves or capital reserves. An essential point to note is that a reserve is not a charge to be deducted before arriving at the profit for the period under review, but it is an appropriation [...]

Now about accruals, below description about accruals! a. Accrued expenditure Invoices received from suppliers represent accrued expenditure in one sense of the term, but the expression is more strictly used to cover expenditure accrued but not yet evidenced by a formal invoice or bill from the creditor. If accounts are made up to

In spite of these qualifications the balance sheet remains a valuable source of information to management and outside interests for two reasons in particular. It provides an informative picture of available funds, by comparing current assets with current liabilities, particularly the more liquid aspects of these items. The second main use of the balance sheet [...]