Question : Assertion A: - Financial analysis identifies symptoms of the problems but does not offer its diagnosis. The management has to look for remedies to rectify the problems.

Reason R: - Analysis of financial statements is based on the information given in the financial statements. Hence, this analysis suffers from various limitations from which the financial statements.

Option 1: Both Assertion A and reason R are correct but the reason R is not the correct explanation of Assertion A 

Option 2: Both Assertion A and reason R are correct but the reason R is the correct explanation of Assertion A 

Option 3: Both Assertion A is  correct but the reason R is not correct 

Option 4: Both Assertion A is and reason R are not correct 

Question : Assertion:- For analysis, it is necessary to reclassify the complex data contained in the financial statements into purposive classes so that the maximum desired information from every data for Analysis can be extracted or obtained.

Reason: - Reclassification and rearrangement of different data depends upon the purpose of analysis.

Option 1: Both Assertion A and reason R are correct but the reason R is not the correct explanation of Assertion A

Option 2: Both Assertion A and reason R are correct but the reason R is the correct explanation of Assertion A

Option 3: Both Assertion A is correct but the reason R is not correct

Option 4: Both Assertion A is and reason R are not correct 

Question : Assertion A:- Long-term and short-term solvency of an enterprise can be assessed on the basis of financial statement analysis. 

Reason R:- Such analysis is done by a securities analyst who is interested in cash-generating ability, dividend payout policy and the behavior of share prices.

Option 1: Both Assertion A and reason R are correct but the reason R is not the correct explanation of Assertion A 

Option 2: Both Assertion A and reason R are correct but the reason R is the correct explanation of Assertion A

Option 3: Both Assertion A is correct but the reason R is not correct

Option 4: Both Assertion A and reason R are not correct

Question : Assertion A:- Window dressing refers to the presentation of a better financial position than what it actually is by manipulating the books of account. On account of such a situation, financial analysis may give false information to the users.

Reason R:- Analysis of financial statements is based on the information given in the financial statements. Hence, this analysis suffers from various limitations from which the financial statements

Option 1: Both Assertion A and reason R are correct but the reason R is not the correct explanation of Assertion A 

Option 2: Both Assertion A and reason R are correct but the reason R is the correct explanation of Assertion A

Option 3: Both Assertion A is correct but the reason R is not correct

Option 4: Both Assertion A and reason R are not correct

Question : Assertion A :-  Analysis of financial statements is based on the information given in the financial statements. Hence, this analysis suffers from all such limitations from which the financial statements suffer.

Reason R:- The subjectivity is inherent in personal judgment, the financial statements are, therefore, not free from bias.

In the context of the above two statements, which of the following is correct?

Option 1: Both Assertion A and reason R are correct but the reason R is not the correct explanation of Assertion A

Option 2: Both Assertion A and reason R are correct but the reason R is the correct explanation of Assertion A

Option 3: Both Assertion A is correct but the reason R is not correct

Option 4: Both Assertion A is and reason R are not correct