Question : Assertion-Reason Questions: Chapter - Sources of Business Finance
Questions : Business Finance and Its Meaning
Assertion: Uncertainty and risks in business operations do not necessitate the need for finance.
Reason: Business finance only addresses short-term funding requirements.
Option 1: Both assertion and reason are true, and the reason is the correct explanation of the assertion.
Option 2: Both assertion and reason are true, but the reason is not the correct explanation of the assertion.
Option 3: Assertion is true, but the reason is false.
Option 4: Both assertion and reason are false.
Correct Answer: Both assertion and reason are false.
Solution : The correct answer is (d) Both assertion and reason are false.
The assertion that "Uncertainty and risks in business operations do not necessitate the need for finance" is false. Uncertainty and risks in business operations often increase the need for finance to manage and mitigate these risks effectively. Finance is crucial for creating a safety net and implementing strategies to deal with uncertainty and risks in business.
The reason that "Business finance only addresses short-term funding requirements" is false. Business finance encompasses both short-term and long-term funding requirements. It involves managing a company's financial resources and decisions related to investments, capital structure, budgeting, cash flow management, and financial planning for both short and long-term sustainability and growth.
Assertion: Need for business finance arises due to uncertainties and risks.
Reason: Business operations are always predictable and stable.
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