Question

Assertion (A): Income earned by lending money is called profit.

Reason (R): Income earned from a rental property is called passive income.

Options

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

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

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

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

Answer 1

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

Explanation:

• The assertion states that “Income earned by lending money is called profit”. This is false. Income earned by lending money is called interest, not profit.
• The reason states that “Income earned from a rental property is called passive income”. This is true. Passive income is money earned from a business or property in which one is not actively involved, such as rental income from a property.

Therefore, the assertion is false and the reason is true.