GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Cost of depreciation fund computed as
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Profit
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Dividend
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Short term loan capital
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Long term loan capital
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Explanation:
Detailed explanation-1: -an amount of money that a company has available to buy new assets. It comes from the investment of a sum equal to the depreciation allowance for its existing assets: The director maintains a depreciation fund for the purchase of replacement vehicles and additions to the fleet.
Detailed explanation-2: -Key Takeaways. The sinking fund method is a depreciation technique used to finance the replacement of an asset at the end of its useful life. As depreciation is incurred, a matching amount of cash is invested, usually in government-backed securities.
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