Sinking Fund

Accounting Terms Dictionary

Select a letter below to view all accounting terms that begin with that letter.

Sinking Fund

An investment earmarked for paying off long-term debt.

ABC Company is going to have to repay $1,000,000 in debt in 20 years. Every year for the next 20 years they will put $50,000 in a bank account so that when the loan comes due they will have the $1,000,000 to pay it back. This bank account is called a sinking fund.

There is currently no content classified with this term.

Get instant access to step-by-step instructions on how to apply and sit for the CPA Exam.

Expected or Past Undergrad Graduation Date*

When Do You Plan to Start Studying?