Question

Loss on sale of 'Sinking Fund Investments' will be debited to:
(a) Surplus in Statement of Profit & Loss
(b) Sinking Fund Account
(c) Sinking Fund Investments Account (d) General Reserve Account​

Answer 1

Answer:

Option D is correct.

Explanation:

the sale proceeds of the old asset and any profit or loss from the sale of investments are transferred to the Sinking Fund Account. The balance in the Sinking Fund Account is then transferred to the Profit and Loss A/c or General Reserve.

Answer 2

The correct answer is option (d) General Reserve Account​.

Explanation:

• A sinking fund is an account a corporation which is used to set aside money
• Loss on sale of 'Sinking Fund Investments' will be debited to General Reserve Account​.
• As the sale proceeds of the old asset and any profit or loss from the sale of investments are generally transferred to the Sinking Fund Account.
• The balance in the Sinking Fund Account is then, it is transferred to the Profit and Loss A/c or General Reserve.