Question

Assertion (A): If Gross Profit Ratio is 25%, sale of goods for ₹ 2,00,000 will increase the ratio.

Reason (R): There will be no change in Gross Profit Ratio because Gross Profit will increase by the same percentage i.e., 25%.

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

पर्याय

• 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

(A) is false, but (R) is true.

Explanation:

If the Gross Profit Ratio is 25%, additional sales will increase gross profit in the same proportion (25% of sales), keeping the ratio constant. As a result, the assumption that the ratio will increase is incorrect, but the reason is that the ratio will not change.