What is the meaning of this statement?

Question

"the continued existence of general reserve is dependent upon the continued existence of surplus of assets...."

plz explain...need to submit the answer as soon as possible

Answer 1

Existance of Any Reserve is ofcourse depends upon the availibility of those assets (of which that reserve is formed)beyond your usage capasity ,only what is left after fulfilling your need can be stored as reserve ,hence the supply needs to be in surplus of demand to form a reserve.

Answer 2

To have a long term, continued Reserve (or a savings of money, food, property, etc) it is necessary to have continual Resource from which this Reserve is established (accumulated savings, strong business / sales, jobs and production, etc).

If nothing is being saved or produced, there will not be a reserve (or a supply) that is the result of production.