Read the given below two statements and mark the correct answer.
Assertion (A): Investments represent the funds invested in government securities, shares of a company, etc.
Reason (R) : They are shown at cost price or market price, whichever is lower.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- Assertion (A) is true but Reason (R) is False.
Assertion (A): Investments represent the funds invested in government securities, shares of a company, etc. THIS IS TRUE.
Reason (R) : They are shown at cost price or market price, whichever is lower. THIS IS FALSE as investments are shown at cost price.
Investments represent the funds invested in government securities, shares of a company, etc. They are shown at cost price. If, on the date of preparation the balance sheet, the market price of investments is lower than the cost price, a footnote to that effect may be appended to the balance sheet.