Question : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as :
Assertion (A) : Sale of Fixed Asset is written under Investing Activity.
Reason (R) : Sale of Fixed asset leads to inflow of Cash.
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, but Reason (R) is not the correct explanation of Assertion (A).
Solution : The buying and selling of long-term assets and other investments that aren't cash equivalents are considered investing activities.
Hence the correct answer is option 2.
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