Reserves consist of the currency in the bank's vaults plus the balance on its reserve account at a Federal Reserve Bank.
Reserves can be described as the profits as well as gain which can be allotted for a specific purpose.
It should be noted that the Reserves are been set up to:
In conclusion, reserve can be seen as credit balance which can be refer to a part of shareholders' equity as well as liability which is been used in the process of estimating claims as well aas contra-asset that can be used for uncollectible accounts hence Reserves can be seen as one that have the currency in the bank's vaults with the balance on its reserve account .
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