Which of the following are similarities between the sinking fund and the savings account?
(A) The sinking fund and the savings account are both financial tools.
(B) Both can be used in any emergency.
(C) They both involve setting aside an amount of money for the future.
(D) Both are long-term accounts which can be closed any time.
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (A) and (C) only
Analysis of statements:
(A) True – Both are financial tools.
(B) False – Sinking fund is usually meant for a specific purpose and not for emergencies.
(C) True – Both involve setting aside money for future use.
(D) False – Sinking fund is for a fixed term; savings account can be closed anytime.