Question

Assertion (A): Financial analysis is affected by window-dressing.

Reason (R): Window-dressing refers to the presentation of a better financial position than the actual position by manipulating the books of accounts. Since financial analysis is based upon financial statements it is also affected by window-dressing.

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

Options

• (A) and (R) both are correct and (R) correctly explains (A).

• Both (A) and (R) are correct but (R) does not explain (A).

• Both (A) and (R) are incorrect.

• (A) is correct but (R) is incorrect.

Answer 1

(A) and (R) both are correct and (R) correctly explains (A).