Question

ASSERTION: Capital receipts neither create a liability nor involve a reduction in the value of fixed assets.

REASONING: Capital receipts are shown on the liabilities side of the Balance Sheet.

विकल्प

• A is true, and R is the incorrect 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:

A is incorrect because capital receipts either create a liability (e.g., loans) or reduce fixed assets (sale proceeds). R is correct because such receipts (capital introduced, long‑term loans) appear on the liabilities/equity side of the Balance Sheet.