Answer to Question #69293 in Accounting for richard
explain all about sunk fund account and solve an example
A sinking fund is fund which is created for a specific purpose. The sinking fund is created for following purposes: 1) To redeem or repay long term liabilities. For example: debentures, long term loans etc. 2) To replace a wasting assets. For example: mines etc. 3) To replace an assets of depreciable nature. For example: fixed assets.