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Reserve and Surplus

29 December 2018

Sir I want to know what is reserve and surplus. What is the difference for net profit transfer to capital and transfer to reserve and surplus in Tally Accounts. Briefly clarify .

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Sumit Sarswat (Student) (3154 Points)
Replied 29 December 2018

In accounting terminology Reserve means keeping some amount aside for future activities. It may be for buying an assets or maintaince repairs. Otherwise, for paying bonus or even for legal settlements.

Surplus means an amount or stock whatever it may be leftover after meeting your demand. In simple terms you can say excess of revenue or stocks.

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