Consider the following statements:
Statement (A): Balance sheet shows liquidity position of a business on a particular date.
Reason (R): Balance sheet is prepared on basis of actual transactions which are recorded in the books of accounts.
Give the correct answer:

A. A and R both are correct and R is correct explanation of A

B. A and R both are correct and R is not correct explanation of A

C. A is correct but R is wrong

D. A is wrong but R is correct

Answer: Option A