CUET Preparation Today
Read the given below two statements and mark the correct answer. Assertion (A): Dividend equalisation reserve is created to stabilise or maintain dividend rate. In the year of high profit, amount is transferred to Dividend Equalisation reserve. In the year of low profit, this reserve amount is used to maintain the rate of dividend. |
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A). Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A). Assertion (A) is true but Reason (R) is False Assertion (A) is false but Reason (R) is true |
Assertion (A) is true but Reason (R) is False |
The correct answer is option 3- Assertion (A) is true but Reason (R) is False. Assertion (A): Dividend equalisation reserve is created to stabilise or maintain dividend rate. In the year of high profit, amount is transferred to Dividend Equalisation reserve. In the year of low profit, this reserve amount is used to maintain the rate of dividend. THIS IS TRUE. Reason (R) : It is a specific reserve which is created for some specific purpose and can be utilised for general purpose. THIS IS FALSE as specific reserve can be utilised for that purpose only not for general purpose. Thus, correct answer is Assertion (A) is true but Reason (R) is False. |
