Question

8. A fund formed by periodically setting aside money for the gradual

repayment of a debt or replacement of a depreciating asset is known as --

------.

A) Resource Fund
B) Emergency Fund
C) Contingency Fund

D) Sinking Fund​

Answer 1

Step-by-step explanation:

The answer is Contingency Fund.

Answer 2

A fund formed by periodically setting aside money for the gradual repayment of a debt or replacement of a depreciating asset is known as a sinking fund.

• A sinking fund is a type of fund that is created to set aside and keep the money for large expenses in the future. A sinking fund is established to use the saved up money to mainly settle loans and bonds.
• A sinking fund is named so as it indicates the shrinking level of the remaining amount due after it is paid off.
• A sinking fund ensures the security of a company from bankruptcy in the future and also helps the company to contribute to the maturity of the bond.
• It also helps a company to maintain low-risk factors and offers protection which makes a good impression on the investors.