reserve


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Reserve

An accounting entry that properly reflects contingent liabilities.

Allowance for Doubtful Accounts

Extra funds from sales, or another source, set aside in order to pay off bad debt if and when it arises. The allowance helps a company ward off any potential cash flow problems should its credit sales not be repaid as expected. On financial statements, it is important to note that an allowance for bad debts exists for fiscal conservatism and not because one expects a large amount of bad debt to accumulate. An allowance for doubtful accounts is also called a cushion. Banks call these funds the loan loss reserve. See also: Savings account.

Reserves

reserve

The funds that are earmarked by a firm from its retained earnings for future use, such as for the payment of likely-to-be-incurred bad debts. The existence of such a reserve informs readers of the firm's financial statements that at least a part of the retained earnings will not be available to the stockholders. See also allowance for doubtful accounts, reserve for contingencies.
References in periodicals archive ?
The Center is a public legal entity engaged in activities in the areas of study from a scientific, historical and cultural point of view, propaganda, preservation, development and purposeful use of monuments, elements belonging to the historical, tangible and intangible cultural heritage at the State Agency for Tourism, as well as increasing the tourist potential of nature reserves.
John Zito is an intern in the Research Department of the Federal Reserve Bank of Cleveland.
To deal with the 2008 financial crisis, the Federal Reserve pumped large amounts of reserves into the banking system and introduced new programs that altered the terms of the trade-off banks make when deciding their level of excess reserves.
4) 2P Reserve Life Index ( RLI ) increased to 14 from a 2011 year-end RLI of 13.
Some banking industry observers believe that IOR may have caused banks to hold excess reserves rather than use them to fund loans, noting that paying interest has narrowed the spread between the interest earned on a loan and the interest earned by simply holding funds in a Federal Reserve account.
Debora Gordon List of provisional candidates and reserve for Legislative Assembly seats (state women's list) Mrs.
"The concept to create some sort of reserve transportation functional readiness command is one that the force structure staff of SDDC has been working on since shortly after 9-11," Askey said.
In Brandtjen & Kluge, Inc., 34 TC 416 (1960), the court allowed a bad-debt deduction under the specific charge-off method when the taxpayer's book entries consisted of a credit to a new reserve account.
Every day, in situations like these, reserve officers show their courage and dedication.
In 1916, using its constitutional authority to "raise and support armies," Congress passed the National Defense Act, which created the Officers' Reserve Corps, Enlisted Reserve Corps and Reserve Officers' Training Corps.
During the 1970s, the Club of Rome report The Limits to Growth projected that, assuming consumption remained flat, all known oil reserves would be entirely consumed in just 31 years.
The American Council of Life Insurers' recent proposal to provide short-term relief from redundant reserves for writers of term life and universal life with secondary guarantees is gaining steam.