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 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

Question : Assertion A:- The term; Financial Analysis includes both; Analysis; and Interpretation, Analysis is concerned with the simplification of financial data given in the financial statements by proper classification. Interpretation is concerned with explaining the meaning and significance of the financial data.

Reason R: - These two terms are complementary to each other, i.e., analysis is not of much use without interpretation 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 and reason R are not correct

Question : Assertion A: - For inter-firm comparison, it is necessary that accounting practices followed by the firms do not vary significantly. As there may be variations in accounting practices followed by different firms, a meaningful comparison of their financial statements is not possible.

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:- 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