Question

Assertion (A): Interest accrued and due is shown under ‘Other Current Liabilities’ whereas Interest accrued but not due is shown under ‘Short-term Provisions’.

Reason (R): Since both interest accrued and due and interest accrued but not due are payable within 12 months from the date of Balance Sheet, they are shown under ‘Other Current Liabilities’.

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

Options

• Both (A) and (R) are correct and (R) is the correct reason of (A).

• Both (A) and (R) are correct but (R) is not the correct reason of (A).

• Only (R) is correct.

• Both (A) and (R) are wrong.

Answer 1

Only (R) is correct.

Explanation:

Assertion is incorrect because both interest accrued and due and interest accrued but not due are shown under Other Current Liabilities, not under Short-term Provisions.
Reason is correct as both are payable within 12 months, so they fall under current liabilities.