Practicing Success
Read the given below two statements and mark the correct answer. Assertion (A): Bad debts are shown on the debit side of the profit and loss account. |
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 |
Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A). |
The correct answer is option 2- Both Assertion (A) and Reason (R) are true and Reason (R) is not the correct explanation of Assertion (A). Assertion (A): Bad debts are shown on the debit side of the profit and loss account. THIS IS TRUE. Bad debts refer to the amount that the firm has not been able to realise from its debtors. It is regarded as a loss and is termed as bad debt and shown on the debit side of profit and loss account. Thus, both statements are true but reason does not explain assertion. |