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CUET · MATHS · PYQ PAPER 2025

Which of the following statements about the Sinking Fund are correct?
(A) It is a fund established by a business entity by setting aside revenue over a period of time to fund a future capital expense.
(B) It is a fund established by a business entity by setting aside revenue over a period of time to fund a future repayment of a long-term debt.
(C) It is set up for any purpose that it may serve.
(D) It is a fund that is accumulated for the purpose of paying off a financial obligation at some future designated date.
Choose the correct answer from the options given below :

  1. A (A), (B) and (D) only
  2. B (A), (B) and (C) only
  3. C (A), (B), (C) and (D)
  4. D (C) and (D) only
Verified Solution

Answer & Solution

Correct Answer

(A) (A), (B) and (D) only

Step-by-step Solution

Detailed explanation

The correct statements regarding a Sinking Fund are (A), (B), and (D). Therefore, the correct answer is (A), (B) and (D) only.