What Is the Basic Journal Entry to Create a General

question 48

Multiple Choice

What is the basic journal entry to create a general reserve?

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

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Definitions:

Comprehensive Income

Comprehensive Income includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

IFRS

International Financial Reporting Standards, which is a set of accounting standards developed by the International Accounting Standards Board (IASB) that guide the preparation of financial statements globally.

U.S. GAAP

United States Generally Accepted Accounting Principles, a framework of accounting standards, principles, and procedures used in the U.S. for financial reporting.

Earnings Per Share

A measure of a company's profitability, calculated as its net income divided by the total number of outstanding shares.