Question

ASSERTION: Capital receipts are shown in the Profit and Loss account.

REASONING: Capital expenditure is shown in the Balance Sheet.

विकल्प

• A is true, and R is the correct explanation for A.

• A is true, and R is not the correct explanation for A.

• A is true, but R is false.

• A is false, but R is true.

Answer 1

A is false, but R is true.

Explanation:

The assertion is false because capital receipts are not recorded in the Profit and Loss Account; they are shown on the liabilities side of the Balance Sheet. However, the Reason is true because capital expenditure is capitalised and recorded in the Balance Sheet as an asset.