Multiple choice book keeping and accountancy reserve and fund kinds of reserves secret reserve reserves Sinking funds is created for___________. redemption of long term liabilities replacement of depreciable assets both (A & B) none of the above Reveal answer Fill a bubble to check yourself C Correct answer Explanation Option C is the correct One.there are two main purpose of creating Sinking fund1. Repayable of long term debt2.Certain amount keep a side for the payment of regular expenses for the specific purpose.