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Question : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as :

Assertion (A) : Sale of Fixed Asset is written under Investing Activity.

Reason (R) :  Sale of Fixed asset leads to inflow of Cash.

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, but 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


Team Careers360 8th Jan, 2024
Answer (1)
Team Careers360 22nd Jan, 2024

Correct Answer: Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).


Solution : The buying and selling of long-term assets and other investments that aren't cash equivalents are considered investing activities.

Hence the correct answer is option 2.

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