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Home Questions PHQXDRF5DK
Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:

There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the codes provided below-
Assertion: Bifurcation of Share Capital into Equity Share Capital and Preference Share Capital is shown on the face of the balance sheet.
Reasoning: Bifurcation of Share Capital into Equity Share Capital and Preference Share Capital is shown in the notes to accounts.

Options:

Both Assertion (A) and reasoning (R) are correct and R is the correct explanation of A.

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

Assertion (A) is true but Reasoning (R) is not correct.

Assertion (A) is not true but Reasoning (R) is correct.

Correct Answer:

Assertion (A) is not true but Reasoning (R) is correct.

Explanation:

The shareholders’ funds are sub-classified on the face of the balance sheet.
a) Share Capital
b) Reserves and Surplus
c) Money received against Share Warrants
Disclosures relating to share capital are to be given in notes to accounts.

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