Concept:A reserve is the portion of profit deliberately kept aside in the business instead of being distributed to the owners.
Explanation:A business earns profit from its operations. This profit may be fully withdrawn by the owner or retained for future use.
The amount set aside out of profits to make the financial position of the business stronger is called a reserve.
Such a reserve is created by transferring a part of the profit to a specific account, for example, a general reserve.
This retained amount helps the business to meet unexpected losses, finance expansion, and strengthen its working capital.
Depreciation is not the correct option because depreciation refers to the spreading of the cost of a fixed asset over its working life.
Surplus is also not the best answer here, as the term reserve specifically describes profit kept aside for a stated purpose.
Therefore, the correct answer is reserve.
Answer:B. reserve