Read the following statements and mark the correct answer.

Assertion: The balance sheet shows the financial position of the company at a particular date.
Reasoning: Receipts and payments record cash receipts and cash expenditures only. It also include those pertaining to previous years or future years.

Both Assertion (A) and reasoning (R) are correct and but R is not the correct explanation of A.

The correct answer is Option 2- Both Assertion (A) and reasoning (R) are correct, but R is not the correct explanation of A.

Assertion: The balance sheet shows the financial position of the company at a particular date. This is true. The balance sheet provides a snapshot of a company's financial position at a specific point in time.

Reasoning: Receipts and payments record cash receipts and cash expenditures only. It also include those pertaining to previous years or future years. This is also true. Receipt and Payment Account gives summarised picture of various receipts and payments, irrespective of whether they pertain to the current period, previous period or succeeding period or whether they are of capital or revenue nature. It may be noted that this account does not show any non cash item like depreciation.

Thus both statements are true but R does not explain A. Both statements depict a different fact. Both are not related to each other.