Distinguish between general reserve and specific reserve.

Basis of Difference

General Reserve

Specific Reserve

Meaning

When the reserve is created without any specified purpose, the reserve is called general reserve.

When reserve is created for some specific purpose, the reserve is called specific reserve.

Usage

It can be used for any purpose.

It cannot be used for any purpose other than the specified purpose for which it is created.

Examples

Retained earnings, reserve funds, etc.

Debenture redemption reserve, dividend equalisation reserve, etc.