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Home Questions ZQJDM6VDCG
Target Exam

CUET

Subject

Accountancy

Chapter

Accounting for Shares

Question:

There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the codes provided below-
Assertion: Every company is required to have its own seal.
Reasoning: The company being an artificial person, can not sign its name by itself and thus its seal acts as the official signature of the company.

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:

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

Explanation:

The company being an artificial person, cannot sign its name by itself. Therefore, every company is required to have its own seal which acts as official signatures of the company. Any document which does not carry the common seal of the company is not binding on the company.

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