Question

Assertion (A): Interest received by a company on investment in 8% debentures is a financing activity.

Reason (R): Interest received by a company on calls-in-arrears is a financing activity.

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 incorrect, but (R) is correct.

Answer 1

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