Where companies keep their Reserves and Surplus money?

[nyadav]

Where companies keep their Reserves and Surplus money? How it is different from cash in hand?

[Karthik]

@nyadav

Where companies keep their Reserves and Surplus money?

Current account of the company.

Check this post -

Balance sheet related query

A portion of profits made during the year is saved under the general reserves of the company. The closing balance of reserve for this year is also the opening balance of the reserves for the current year, add to it a portion of the current year’s profit and you get the closing balance for the current year. What I’m trying to say here is that reserves get carried year on year. Since this money belongs to the shareholders, from the company’s perspective this is a liability. Cash, on the other ha…

[Ankit_Ek]

@nyadav

Where companies keep their Reserves and Surplus money? How it is different from cash in hand?

Won’t they be investing in FDs, Mutual funds etc? I guess they do.

[Karthik]

They do, mostly in liquid funds. These are often termed as cash equivalents.