Question

Assertion (A): Called-up Capital means share capital called-up by the company on the Subscribed Shares.

Reason (R): When a company issues shares amount of which is receivable in instalments, it calls upon the shareholders to pay the amount as called. Thus, it is the Called-up Capital.

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

Options

• Assertion (A) and Reason (R) are correct but Reason (R) is not the correct explanation of Assertion (A).

• Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).

• Assertion (A) is false but Reason (R) is true.

• Both Assertion (A) and Reason (R) are false.

Answer 1

Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).