Read the following statements and mark the correct answer.

Assertion: The facts and figures presented through financial statements are based on personal opinion, estimates and judgements.
Reasoning:  Provisions for doubtful debts are made on estimates and personal judgements.

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.

The assertion that facts and figures presented through financial statements are based on personal opinion, estimates, and judgments is true because financial statements often involve subjective assessments, such as estimating the useful life of assets or determining the provision for doubtful debts.

However, the reason that provisions for doubtful debts are made on estimates and personal judgments is only one example of how financial statements involve subjective assessments. It doesn't fully explain the broader assertion that financial statements overall rely on personal opinions, estimates, and judgments. Therefore, while both statements are correct, the reason does not directly explain the assertion.