CUET Preparation Today
Which one of the following statement is incorrect about sinking fund? |
It is a fixed term account. It is set-up for a particular upcoming expense. In this fund a fixed amount at regular intervals is deposited. It can be used in any emergency. |
It can be used in any emergency. |
The correct answer is Option (4) → It can be used in any emergency. ** A sinking fund is created for a specific future purpose and cannot be used freely. Correct interpretation: • It has a fixed term. ✔ • It is set up for a specific upcoming expense. ✔ • A fixed amount is deposited at regular intervals. ✔ • It cannot be used in emergencies. ✘ Incorrect statement: It can be used in any emergency. |
