Question : Assertion A :- Redemption of preference share at a premium will result in outflow of cash Reason: - Redemption of preference share decrease cash and cash equivalents
Option 1: Assertion A and reason R are correct and reason R is the correct explanation of assertion A
Option 2: Assertion A and reason R are correct but reason R is not the correct explanation of Assertion A
Option 3: Both assertion A and reason R are not correct
Option 4: Assertion A is correct but the reason R is not correct
Correct Answer: Assertion A and reason R are correct and reason R is the correct explanation of assertion A
Solution : Answer = Assertion A and reason R are correct, and reason R is the correct explanation of assertion A
Assertion A is correct because the redemption of preference shares at a premium typically involves an outflow of cash. Reason R is correct because redeeming preference shares reduces the cash and cash equivalents of a company. Therefore, Assertion A and Reason R are both correct, and Reason R is the correct explanation of Assertion A. Hence, the correct option is 1.
Question : Assertion (A): Non-cash transactions are not considered in preparing Cash Flow Statement.
Reason (R): Non-Cash transactions do not affect Cash and Cash Equivalents.
In the context of above two statements, which of the following is correct?
Question : Assertion: A purchase of furniture on credit will not result in flow of cash or cash equivalents Reason R: - purchased of furniture on credit will not involve cash. In the context of above two statements, which of the following is correct
Question : Assertion A:- unclaimed dividend does not result in flow of cash Reason: R It does not effect of the company since there is no payment of cash.
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