Classify General Reserve

Hey Garima.....................

Reserves are real accounts.......as its not personal & not related to any type of expences & losses its just a transfer of profit................

real account

can anyone explain why it is Real a/c and not Nominal A/c ????????

One cannot blindly classify any Reserve A/c..

Any reserve is either created against any Asset / Personal A/c / Expenses / Incomes.

So nature of any reserve A/c depends primarily against the classification above.

If Plant revaluation reserve is created, it means the same has been created against Asset(Plant). So Plant Revaluation reserve will be also a Real A/c as per valuation principles.

Similarly, DRR created is against a Representative Personal A/c, so DRR will be personal A/c.

Hope you understood.

I Agree with Faiz Ahmed!!!

Can Any one tell me the way of posting a query????

Its a real account ..:)

i agreed with Faiz Ahmed

gen reserve is nominal sine it is created just by debiting p&l a/c.