Question

10) A fund where money is held by your financial institution to pay amounts that

will come due during the year is called a(an)

Answer 1

Sinking fund

Step-by-step explanation:

A sinking fund is like a provision account that is set up to cater for obligations that are expected to fall due for settlement in the future e.g debts that her to be repaid in five (5) years time can be provided for through a sinking fund account by putting aside a certain amount of money periodically into the account such that by the time the time for repayment comes, the amount in the sinking fund would have accumulated enough to pay the debt