Question : Given below are two statements, one labelled as Assertion (A) and the other labeled as Reason (R): 

Assertion (A): Revaluation A/c is prepared at the time of Admission of a partner.  

Reason (R): The profit or loss on the revaluation of assets and liabilities, on reconstitution of firm, is related to old partners in their old ratio. 

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

Codes:

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

Option 2: Both (A) and (R) are correct but (R) is not the correct Reason of (A). 

Option 3: Only (R) is correct. 

Option 4: Both (A) and (R) are wrong. 

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

Assertion (A): Interest Coverage Ratio expresses the relationship between profits available for payment of interest and the amount of interest payable.

Reason (R): A higher ratio ensures lesser safety of interest on debts.

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): A loan from a relative of a partner is an external liability.

Reason (R): It is not transferred to the Realisation Account.

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

Option 3: 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) : Profit and Loss Appropriation account shows the correct profit earned by the firm.

Reason (R) : The net Profit adjusted after takin into account the interest on capital, Interest on drawings, Salaries/ Commission Paid to the partner in the P/L appropriation account.

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: - 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