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Question
ASSERTION: Capital receipts neither create a liability nor involve a reduction in the value of fixed assets.
REASONING: Capital receipts are shown on the liabilities side of the Balance Sheet.
Options
A is true, and R is the incorrect explanation for A.
A is true, and R is not the correct explanation for A.
A is true, but R is false.
A is false, but R is true.
MCQ
Assertion and Reasoning
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Solution
A is false, but R is true.
Explanation:
A is incorrect because capital receipts either create a liability (e.g., loans) or reduce fixed assets (sale proceeds). R is correct because such receipts (capital introduced, long‑term loans) appear on the liabilities/equity side of the Balance Sheet.
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