Question

Assertion (A): Cash received against services rendered is an operating activity.

Reason (R): Cash paid against services taken is an operating activity.

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

Options

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

• Both (A) and (R) are true and (R) is a 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).