GENERAL RESERVE.Sinking fund: A sinking fund may be DEFINED as a fund, created by a charge against or an appropriation of profits represented by specific investments, which is brought into existence for a specific purpose, such as replacement of an asset at the expiration of its life or the redemption of debentures.A sinking fund is a fund containing money set aside or saved to pay off a debt or bond.A company that issues debt will need to pay that debt off in the future, and the sinking fund helps to soften the hardship of a large outlay of revenue.A sinking fund is established so the company can contribute to the fund in the years leading up to the bond's maturity.The balance of the Debentures Sinking Fund after redemption of debentures is transferred to the General Reserve account. It is the amount which is kept separately out of redeemed amount from debentures, that is why it is transferred to the general reserve account.Therefore, where all the debentures are redeemed, the balance left in the debenture sinking fund account is transferable to the General Reserve account. Debenture: In corporate finance, a debenture is a medium- to long-term debt instrument used by large companies to borrow money, at a fixed rate of interest.Capital redemption reserve account is a type of reserve maintained by a company LIMITED by shares and as the name SUGGESTS this reserve deals with shares that are redeemable.