There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the options given below.
Assertion (A): A loan from the spouse of a partner is considered an external liability.
Reason (R): It is shown on the debit side of realisation A/c.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- Assertion (A) is true but Reason (R) is False.
Assertion (A): A loan from the spouse of a partner is considered an external liability. THIS IS TRUE. A spouse's loan is just like a loan from a third party so it is an external liability.
Reason (R): It is shown on the debit side of realisation A/c. THIS IS FALSE. Spouse loan is a third party liability so it is shown on the credit side of realisation account.