Given below are two statements, one labelled as Assertion (A) and the other as Reason (R):
Assertion (A): Capital expenditure is incurred for the purpose of acquiring fixed assets.
Reason (R): Capital expenditure item is shown in the asset side of the Balance sheet.
Select the correct answer:

Solution (By Examveda Team)

Assertion (A): Capital expenditure is incurred for the purpose of acquiring fixed assets.
This statement is TRUE.
Capital expenditure is money spent to buy things that will last a long time and help the business make money in the future.
Think of things like buildings, machinery, or land. These are called fixed assets.

Reason (R): Capital expenditure item is shown in the asset side of the Balance sheet.
This statement is also TRUE.
The Balance Sheet is a snapshot of what a company owns (assets) and owes (liabilities) at a specific point in time.
Because fixed assets are things the company *owns*, they are listed on the asset side of the Balance Sheet.

Now, the important question is: Does Reason (R) *explain* why Assertion (A) is true?

Yes, It is correct explanation of Assertion.

So, the correct answer is:
Option A: Both (A) and (R) are true and (R) is the correct explanation of (A)