Question : Assertion (A): A company's long-term financial position is determined by its liquidity ratios:
Reason (R): Liquidity ratios, such as the current ratio and quick ratio, are useful in determining the firm's long-term financial position.

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 Assertions (A) and Reason (R) are False

Question : Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives given below:

Assertion (A): Activity Ratios are the ratios that are calculated for measuring the efficiency of operations of business based on effective utilisation of resources.

Reason (R): Current ratio and Quick Ratio are liquidity ratios.

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): 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 : Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives given below:

Assertion (A): The limitations of financial statements also form the limitations of the ratio analysis.

Reason (R): Since the ratios are derived from the financial statements, any weakness in the original financial statements will also creep in the derived analysis in the form of Accounting Ratios.

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