[amp_mcq option1=”(A) is true, but (R) false” option2=”Both (A) and (R) are true” option3=”(A) is false, but (R) true” option4=”Both (A) and (R) are false” correct=”option1″]<\/p>\n
The correct answer is: (A) is true, but (R) false.<\/p>\n
A sinking fund is a fund that is created to repay a long-term liability. It is a reserve fund that is set aside to meet a specific financial obligation, such as the repayment of a loan or the redemption of bonds. The money in a sinking fund is typically invested in low-risk securities, such as government bonds or certificates of deposit.<\/p>\n
A charge against profit and loss account is an expense that is deducted from the company’s gross profit to arrive at its net profit. Examples of charges against profit and loss account include cost of goods sold, selling and administrative expenses, and interest expense.<\/p>\n
While a sinking fund may be used to repay a long-term liability, it is not a charge against profit and loss account. Instead, it is a separate fund that is managed by the company’s treasury department.<\/p>\n
The reason (R) is false because a sinking fund is not a charge against profit and loss account.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”(A) is true, but (R) false” option2=”Both (A) and (R) are true” option3=”(A) is false, but (R) true” option4=”Both (A) and (R) are false” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-46748","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"\n