Question : In the following question, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A) : Depreciation is added to the net profit before tax.
Reason (R) : Depreciation is an Non cash Item which is an expense.
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, but 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, but 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 : Depreciation is added to the net profit before tax because it is a non cash item which is treated as Expense.
Hence the correct answer is option 1.
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