Question : Assertion (A): If the ratio is currently 2:1, selling office equipment for Rs.15,000 (book value: Rs.20,000) will increase it. Reason (R): The cash proceeds from the sale of office equipment will enhance current assets (cash), while current liabilities stay the same. As a result, the current ratio will rise.
Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
Option 2: Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A)
Option 3: Assertion (A) is true but Reason (R) is False
Option 4: Assertion (A) is False and Reason (R) is True.
Correct Answer: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
Solution : Sale of Office Equipment for Rs. 15,000 (Book Value Rs. 20,000): The sale of Office Equipment (e.g., Typewriter ) results in an increase in Cash balance by Rs. 15,000 and this leads to an increase in current assets. There will be no other effect of the sale of office equipment since it is a fixed asset. Hence option 1 is the correct answer.
Question : Assertion (A): A single cropping system was replaced by a multi-cropping system as a result of crop diversification. Reason (R): Due to a rise in market risk brought on by price fluctuations, it decreased farmers' revenue.
Question : Assertion: Planning in India is primarily focused on promoting quick, balanced economic growth that is inclusive and just. Reason: It is widely believed that poverty and unemployment are the main obstacles to India's development.
Question : Assertion (A): High levels of human capital imply not only high earning potential but also a shift in the social and economic landscape. Reason (R): It alters one's style of thinking and enables one to come to informed and logical judgments.
Question : Assertion: Inflation can worsen the poverty situation in a country.
Reason: Rising prices erode the purchasing power of the poor, making it difficult to afford essential goods and services.
Question : Assertion: A tall organizational structure can lead to delays in decision-making.
Reason: It involves several layers of management between top-level and lower-level employees.
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