Which of the following is not the specification of the Sinking Fund?

The correct answer is Option (2) → It can be used in an emergency.

A sinking fund is built by depositing a fixed amount at regular intervals for a fixed term, so that a known sum is ready for a particular future expense, such as replacing a machine or repaying a debt. Options (1), (3) and (4) describe exactly this.

The money is set aside for that one purpose, so it is not meant for emergencies. Option (2) is not a specification of a sinking fund.