Accounting for Sinking Fund

Q.

Which account is to be debited to transfer interest on investment to debenture redemption fund?

1. None of these

2. Sinking fund table

3. Investment table

4. Funds table

Q.

What is the journal entry we pass for investing money in debenture redemption fund?

1. None of these

2. Either Assets or liabilities

3. Assets

4. Liabilities

Q.

What is meant by redemption of debentures?

Q. Which of the following actually results in outflow of cash?

1. Preliminary Expenses written off
2. Depreciation on assets
3. Final dividend paid
4. Both (a) and (c)

Q.

Which account is to be debited to set aside funds for debenture redemption?

1. None of these

2. Either Assets or Liabilities

3. Assets

4. Liabilities

Q. What is the treatment of debenture redemption fund while transferring amount to sinking fund?

1. Credit
2. Debit

Q.

What is meant by redemption of debentures by ‘Purchase in the Open Market’?

Q. Under Annuity method Asset A/c is debited by ________________.

1. Interest A/c
2. Depreciation fund A/c
3. None of these
4. Sinking fund A/c

Q. Interest debited to asset account in which method of depreciation?

1. Depreciation fund method
2. Annuity method
3. Insurance policy method
4. Revaluation method

Q. What is the treatment of interest on investment account at the time of receipt of interest on debenture redemption fund investment?

1. Debit
2. Credit

Q. What is the treatment of profit or loss account while transferring amount to sinking fund?

1. Debit
2. Credit