Financial Accounting Reserves

A reserve in financial accounting is a credit balance that can refer to a part of shareholders' equity, a liability for estimated claims, or contra-asset for uncollectible accounts.

A reserve can appear in any part of shareholders' equity except for contributed or basic share capital.

An 'operating reserve' in nonprofit accounting refers to the unrestricted cash on hand available to sustain an organization.

<p>The purpose of maintaining an operating reserve in nonprofit organizations is to have a target of several months of operating cash or a percentage of their annual income.</p> Signup and view all the answers

<p>The different types of reserves used in financial accounting include capital reserves, revenue reserves, statutory reserves, realized reserves, and unrealized reserves.</p> Signup and view all the answers

<p>Maximizing the value of the firm for stockholders.</p> Signup and view all the answers

<p>Senior management, often the financial director.</p> Signup and view all the answers

<p>Managing current assets and liabilities, and hedging against fluctuations in foreign currency and product cycles.</p> Signup and view all the answers

<p>Efficient and effective management of funds.</p> Signup and view all the answers

<p>'Staff' refers to financial managers who report to senior management, while 'Line' refers to other functional areas in the organization.</p> Signup and view all the answers