Some accounting questions?

How do replacement reserves work? I understand for non profits its money you set aside form operating to shareholders equity. My senior said its debit investment and credit shareholders equity. What I don't understand is that when you use up the reserve what is the journal entry? Cause isnt it stored in both sides of investment and shareholders equity? Is it debt capital asset and credit investment?.....

question about accruals and reversals. So in auditing we accrue a bill every year. Then we get the read bill which means we would have to reverse the prior year bill right? However my senior says that there is no need to do that as it takes too long so we are going to just expense it. What does that mean?