Question : Read the following statements: Assertion (A) and Reason (R). Choose one of the correct alternatives given below:
Assertion (A): Higher Trade Receivable Turnover means speedy collections from trade receivable.
Reason (R): Trade Receivable Turnover Ratio indicates the number of times the receivables are turned over and converted into cash in an accounting period.
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
Correct Answer: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Solution : The efficiency with which a business is able to collect on its receivables or the credit it gives to clients is measured by the receivables turnover ratio. The ratio also counts the number of times a company's receivables are turned into cash over a specific time period.
Hence the correct answer is option 1.
Question : Assertion (A): A new business is likely to have lesser goodwill. Reason (R): Goodwill is an intangible asset.
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
Question : Assertion: Unemployment and poverty go hand in hand. Reason: Poverty is a result of unemployment
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: Physical capital is tangible in nature Reason: Physical capital can be seen and touchable.
Option 4: Assertion (A) is False but Reason (R) is true.
Question : Assertion (A): Human capital formation is a stock concept. Reason (R): Variables that are measured at a specific time are referred to as stocks.
Question : Assertion (A): Goodwill belongs to the category of intangible assets such as patents, trademarks, copy rights, etc. Reason (R): Goodwill cannot be seen or touched.
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