It depends on the type of reset:
* Erase All Content & Settings will remove all content on the device and install iOS so the user can either start anew or sell/gift the device. It will, however, not remove the content in your iCloud account.
* Reset All Settings will allow you to set all system settings to default values while retaining your data on the device.
I have yet to learn how photos are handled, perhaps someone can chime in and explain how that works.