Question : There are two statements marked as Assertion (A) and Reason (R). Read the statements and choose the prop rite option from the options given below
(A) Both Assertion (A) and Reason (R) are true, but Reason (R) is the correct explanation of Assertion (A).
(B) Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
(C) Assertion (A) is false, but Reason ( R ) is true.
(D) Assertion (A) is true, but Reason (R) is false.
Question:
Assertion (A): Received amount of securities premium will not debited to securities premium reserve account, on forfeiture of shares.
Reason (R): Received amount of securities premium will be debited while writing off of certain type of capital loss or expenditure.
Option 1: A
Option 2: B
Option 3: C
Option 4: D
Correct Answer: B
Solution : Answer = Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A)
Assertion (A) is true because when shares are forfeited, the securities premium received on those shares is not debited to the securities premium reserve account.
Reason (R) is also true because the received amount of securities premium may be debited when writing off certain types of capital loss or expenditure. However, this reason does not provide a correct explanation for Assertion (A). Forfeiture of shares does not typically involve writing off capital loss or expenditure. Therefore, while both statements are true, Reason (R) does not correctly explain Assertion (A).
Hence, the correct option is 2.