Question

Assertion (A): Interest on Debentures is payable to Debenture holder by the company whether the company earns profit or incurs loss.

Reason (R): Interest on Debentures is an expense, i.e., charge against profit to be paid irrespective of the fact that the company has incurred loss.

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).

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

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

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

Answer 1

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