The bond indenture may provide that funds for the payment of bonds at maturity be accumulated over the life of the issue. The amounts set aside are kept separate from other assets in a special fund called a(n)
A) enterprise fund
B) sinking fund
C) special assessments fund
D) general fund

Question

Quizplus · Accepted Answer

The special fund set aside for the payment of bonds at maturity is called a sinking fund. This fund is specifically dedicated to paying off the bonds and is kept separate from the issuer's other assets.

The Bond Indenture May Provide That Funds for the Payment