Distinguish between Reserves and Provisions on the basis of Nature, Purpose, and Investment.

Q19. Distinguish between Reserves and Provisions on the basis of: a) Nature: Reserves: Created by appropriating profits. They represent accumulated undistributed profits set aside for general or specific future purposes, not to meet any known liability or diminution in asset value. Provisions: Created by charging profits. They are amounts set aside to meet a known liability or a known reduction in the value of an asset, the exact amount of which cannot be determined with certainty. b) Purpose: Reserves: To strengthen the financial position of the business, meet unforeseen contingencies, finance expansion plans, or equalize dividends. Provisions: To provide for specific liabilities or losses that are certain to occur but whose amount is uncertain, such as provision for doubtful debts, provision for depreciation, or provision for taxation. c) Investment: Reserves: Can be invested outside the business in marketable securities, forming a "Reserve Fund." Provisions: Cannot be invested outside the business. The funds are typically retained within the business to meet the specific obligation for which the provision was made. --- Q20. Explain any three objectives of accounting. 1. Maintaining Systematic Records: Accounting aims to record all financial transactions in a systematic and organized manner, ensuring that complete and accurate data is available for future reference and analysis. 2. Ascertaining Profit or Loss: A primary objective is to determine the net profit earned or loss incurred by the business during a specific accounting period by preparing a Profit and Loss Account. 3. Ascertaining Financial Position: Accounting provides information about the financial health of the business at a particular point in time by preparing a Balance Sheet, which shows assets, liabilities, and owner's equity. --- Q21. Prepare Sales Book of M/s. Gyan & Bros. of furniture: Sales Book of M/s. Gyan \& Bros. |l|l|l|r|r| Date & Particulars (Name of Customer) & L.F. & Details (Rs.) & Sales (Rs.) \\ 2025 Jan. 5 & Hari \& Co., Kolkata & & & \\ & 10 Tables @ Rs. 1,100 each & & 11,000 & \\ & 5 Chairs @ Rs. 1,000 each & & 5,000 & \\ & Total & & 16,000 & \\ & Less: Trade Discount @ 5\% & & 800 & 15,200 \\ Jan. 10 & M/s. Sharma \& Co., Delhi & & & \\ & 5 Almirahs @ Rs. 5,000 each & & 25,000 & \\ & 10 Stools @ Rs. 1,000 each & & 10,000 & \\ & Total & & 35,000 & 35,000 \\ & Total & & & 50,200 \\