Question : Assertion (A): Jiten, Karan, and Lalit are partners with capitals of Rs.2,00,000, Rs.6,00,000, and Rs.8,00,000, respectively, who share profits in the 3:2:1 ratio. Jiten was granted a salary of Rs.60,000 per year and interest on capitals at 5% per year under the Partnership Deed. The year's net profit is Rs.1,20,000.

Reason (R): The year's distributable profit is insufficient to cover all appropriations. As a result, divisible profit will be distributed in the appropriation ratio, i.e. 7:3:4.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4: Assertion (A) is false but Reason (R) is True

Question : Assertion (A) Partner distribution of earnings and losses is based on their profit sharing ratio, not their capitalization ratio.
Reason (R): Profit is dispersed in proportion to appropriations if the amount of appropriations is greater than the amount of profit available for distribution.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4: Both Assertion (A) and Reason (R) are not correct.

Question : Assertion (R): Profitability Ratios are the indicators of the profitability of the firm.
Reason (R): Profitability Ratios, i.e., Gross Profit Ratio, Operating Ratio, Operating Profit Ratio, Net Profit Ratio, and Return on Investment Ratio help in assessing the efficient use of a firm’s resources to generate profit.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4: Assertion (A) is False and Reason (R) is also False.

Question : Assertion (A): A partner's salary is deducted from the profit and loss account.

Reason (R): A partner's salary is a appropriation of profit.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4: Assertion (A) is false but Reason (R) is true

Question : Assertion (A): The Current Ratio is unaffected by debt redemption.
Reason (R): Debentures that are redeemable within a year have an impact on the current ratio.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4: Assertion (A) is False and Reason (R) is true.

Question : Assertion (A): If Trade Payables are Rs.80,000, Working Capital is Rs.16,00,000, and Current Liabilities are Rs.6,00,000, the Current Ratio will be 2:1.
Reason (R): Current Ratio = Current Assets/Current Liabilities

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).

Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is False

Option 4:  Assertion (A) is False and Reason (R) is False.