Tag: secret reserve

Questions Related to secret reserve

Sinking funds is created for___________.

book keeping and accountancy reserve and fund kinds of reserves secret reserve reserves

  1. redemption of long term liabilities

  2. replacement of depreciable assets

  3. both (A & B)

  4. none of the above

Show answer
Correct Option: C
Explanation:

Option C is the correct One.

there are two main purpose of creating Sinking fund
1. Repayable of long term debt
2.Certain amount keep a side for the payment of regular expenses for the specific purpose.