Question

The balance of sinking fund investment a/c after the realization of investment is tranferred to

• A. P&L a/c
• B. debenture a/c
• C. sinking fund a/c
• D. debentures suspense a/c

Answer 1

Answer:

C. sinking fund a/c

Sufficient funds are required to redeem debentures at the end of a specified period. To meet this requirement, the company may decide to create a sinking fund account. Hence the balance of sinking fund investment account after realization of investment is transferred to sinking fund account.