reserve account


Definition of reserve account

1 : a valuation account that shows the estimated or actual decline in value of an asset and is always subtracted on a balance sheet from the related asset account to show net value a reserve account for depreciation reserve accounts for bad debts reserve account to reduce investments to market value

called also allowance account, provision account, valuation account

2 : an account that shows an accrued usually estimated liability reserve account for income taxes
3 : an account that shows profits or surplus segregated or appropriated for a particular purpose reserve account for contingencies reserve account for replacement of fixed assets

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History and Etymology for reserve account

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Cite this Entry

“Reserve account.” Dictionary, Merriam-Webster, Accessed 11 Jul. 2020.

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