Question

Assertion (A): Old furniture written off is not considered while preparing cash flow statement.

Reason (R): Non-cash transactions do not affect cash and cash equivalents.

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

Options

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

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

• Both (A) and (R) are false.

• (A) is false, but (R) is true.

Answer 1

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