MyQuestionIcon

1

You visited us 1 times! Enjoying our articles? Unlock Full Access!

Accounting for Sinking Fund

Profit on sal...

Question

Profit on sale of sinking fund investment is credited to ______________.

A

General reserve

No worries! We‘ve got your back. Try BYJU‘S free classes today!

B

Capital reserve

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

C

Sinking fund

No worries! We‘ve got your back. Try BYJU‘S free classes today!

D

None of these

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is B Capital reserve
Profit or loss on sale of investments is transferred to sinking fund. After the redemption of all debentures, balance left in sinking fund is transferred to general reserve but the portion of the profit on sale of sinking fund investment is preferably transferred to capital reserve.

Suggest Corrections

thumbs-up

0

Similar questions

Q. Investment in sinking fund by a non profit organization is a/an ______________.

Q. Any profit or loss on the sale of sinking (depreciation) fund investment is transferred to:

Q. After the redemption of debentures, any credit balance in the Sinking Fund A/c is transferred to ______ A/c.

Q. Under sinking fund method of depreciation any surplus in sinking fund A/c is transferred to ____________.

Q. A sinking fund is created for the redemption of debentures of Rs 10,000 at the end of 25 years. How much money should be provided out of profits each year for the sinking fund if the investment can earn interest at the rate 4% per annum?

View More

Join BYJU'S Learning Program

similar_icon

Related Videos

lock

Present value of money

ACCOUNTANCY

Watch in App

explore_more_icon

Explore more

Accounting for Sinking Fund

Standard XII Accountancy

Join BYJU'S Learning Program

CrossIcon