Assertion (A): Cash flow statement, as per the financial statements as well, is incapable of revealing the overall financial position of a firm.
Reason (R): Cash is an important constituent of the working capital based on recorded facts only.

A) Both (A) and (R) are correct, and (R) is the correct explanation of (A) B) (A) is correct, but (R) is incorrect C) (A) is incorrect, but (R) is correct D) Both (A) and (R) are incorrect

Answer & Solution

Correct Answer: Option A

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Assertion (A) Cash flow statement as per the financial statements as...

Assertion (A): Cash flow statement, as per the financial statements as well, is incapable of revealing the overall financial position of a firm. Reason (R): Cash is an important constituent of the working capital based on recorded facts only.

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Assertion (A): Cash flow statement, as per the financial statements as well, is incapable of revealing the overall financial position of a firm.
Reason (R): Cash is an important constituent of the working capital based on recorded facts only.