Question

Assertion (A): Balance Sheet of a Company is prepared on a particular date.

Reason (R): Statement of Profit and Loss of a Company is prepared for a particular period.

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

विकल्प

• Both (A) and (R) are true, but (R) is not the correct explanation of (A).

• Both (A) and (R) are true and (R) is the correct explanation of (A).

• Both (A) and (R) are false.

• (A) is false, but (R) is true.

Answer 1

Both (A) and (R) are true, but (R) is not the correct explanation of (A).

Explanation:

A Balance Sheet is a statement of financial position prepared “as at” a particular date (a snapshot), whereas the Statement of Profit and Loss shows the financial performance “for a particular period”; the fact that P&L is for a period does not explain why the Balance Sheet is prepared at a date.