___________ is created to provide for not only depreciation on the assets but also to provide sufficient funds for replacement of the assets at the end of its life.

Plant and Machinery replacement fund.

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Sinking fund

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Dividend equalization reserve

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Debenture redemption reserve

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Solution

The correct option is B Sinking fund
A sinking fund method is a technique for depreciating an asset in bookkeeping records while generating money to purchase a replacement for the assets when it reaches the end of its useful life.

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Similar questions

	List I		List II
A.	Leasehold property	1.	Depreciation Fund Method
B.	Mines, quarries etc.	2.	Annuity Method
C.	The interest lost on the acquisition of Method an asset	3.	Fixed Instalment Method
D.	To provide for replacement of assets at the end of its useful life	4.	Depletion Method

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