The Entry to Create a General Reserve Is Usually:
A) $\quad$

question 9

Multiple Choice

The entry to create a general reserve is usually:

• A) Dr General reserve\(\quad \) \(\quad \) Cr Retained profits.
• B) Dr Retained profits\(\quad \) \(\quad \) Cr General reserve.
• C) Dr Profit and loss\(\quad \) \(\quad \) Cr General reserve.
• D) Dr Expense\(\quad \) \(\quad \) \(\quad \) Cr General reserve.

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Definitions:

Hedge Accounting

An accounting method that records the offsetting positions of a financial hedge and its underlying asset together to reduce volatility in financial statements.

Speculative Investments

Investments with a high risk of loss but also the potential for significant rewards, often characterized by high volatility.

GAAP Accounting

A set of accounting standards and principles designed to ensure consistency, fairness, and accuracy in financial reporting.

Derivatives

Financial instruments whose value is derived from the value of an underlying asset, index, or security.