Question

Assertion (A): While preparing the Balance Sheet as at 31st March, 2025, if ₹ 5,00,000, 10% debentures are redeemable on 31st October, 2025, they will be shown under main head ‘Current Liabilities’ and sub-head ‘Other Current Liabilities’ as ‘Current Maturities of long-term Debts.’ 

Reason (R): Debentures becoming due for redemption within 12 months from the date of Balance Sheet are shown as Current Maturities of Long-term Debts under the main head Current Liabilities.

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 a 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 a correct explanation of (A).