The Basic Journal Entry to Create a General Reserve Is

question 22

Multiple Choice

The basic journal entry to create a general reserve is:

• A) DR Income, CR General reserve
• B) DR General reserve, CR Retained earnings
• C) DR Profit or loss summary, CR General reserve
• D) DR Retained earnings, CR General reserve

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Definitions:

Clarify

To make a statement or situation less confused and more understandable.

Payment Bond

A type of surety bond that guarantees the payment of subcontractors, laborers, and suppliers on construction projects.

Liens

Legal claims or rights against property or assets that secure the payment of a debt or fulfillment of some obligation.

Suppliers

Entities that provide goods or services to another entity, typically in a business-to-business relationship.