Practicing Success
Practicing Success
CUET Preparation Today
There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below. Assertion (A): An inflow or outflow between components of cash and cash equivalent is not considered while preparing the cash flow statement. |
Both Assertion (A) and Reason (R) are true & Reason (R) is the correct explanation of Assertion (A). Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A). Assertion (A) is false, but Reason (R) is true. Assertion (A) is true, but Reason (R) is false. |
Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A). |
| Assertion (A) is true because when preparing the cash flow statement, only cash flows related to actual cash and cash equivalents are considered, and inflows or outflows between components of cash and cash equivalents are not directly included. Reason (R) is also true. Cash management involves managing the cash flows within a business to ensure optimal liquidity and financial stability. However, while cash management is indeed related to the movement of cash within a company, it is not the specific reason why inflows or outflows between components of cash and cash equivalents are not directly considered in the cash flow statement. The main reason for not considering these inflows and outflows is to provide a clear and accurate representation of the cash movement in and out of the company during a specific period. |
