Commerce Exam > Commerce Questions > Directions : In the following questions, a s...
Start Learning for Free
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:
Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.
Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.
- a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
- b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
- c)Assertion (A) is true, but Reason (R) is false .
- d)Assertion (A) is false, but Reason (R) is true.
Correct answer is option 'D'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Verified Answer
Directions : In the following questions, a statement of Assertion (A)...
It cannot be determined which method of maintaining capital is better, it depends on the preference of the partners.
View all questions of this test
Most Upvoted Answer
Directions : In the following questions, a statement of Assertion (A)...
Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.
Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.
The correct answer for this question is option 'D' - Assertion (A) is false, but Reason (R) is true.
Explanation:
To understand why the correct answer is option 'D', let's examine the given statements in detail.
Fixed Capital Method:
- In a partnership, the capital of the partners is fixed and remains constant throughout the partnership.
- Each partner's capital contribution is recorded in their respective capital accounts, which are maintained separately from the current accounts.
- The current accounts are used to record transactions related to the partner's share of profits, drawings, interest on drawings, and other adjustments.
Fluctuating Capital Method:
- In this method, the capital of the partners fluctuates based on the changes in the partnership's financial position.
- The capital accounts are adjusted periodically to reflect the changes in the partners' investments, withdrawals, profits, and losses.
- The current accounts are used to record day-to-day transactions, such as sales, purchases, and expenses.
Analysis:
- The given assertion states that the fixed capital method is better as compared to the fluctuating capital method.
- The reason provided for this assertion is that the capital of the partners is fixed, and all the transactions are recorded in the current account.
However, this assertion and reason are not entirely accurate. Here's why:
1. Capital Structure:
- The assertion assumes that the fixed capital method is superior because the capital of the partners remains constant.
- While it is true that the capital is fixed in this method, it does not necessarily make it better than the fluctuating capital method.
- The choice of capital method depends on the specific needs and circumstances of the partnership.
2. Transaction Recording:
- The reason states that all the transactions are recorded in the current account in the fixed capital method.
- This is not entirely correct. In the fixed capital method, the current accounts are used to record the partner's share of profits, drawings, interest on drawings, and other adjustments.
- The current accounts are not used to record all transactions, such as sales, purchases, and expenses, which are recorded in separate accounts.
Conclusion:
In conclusion, the correct answer is option 'D' - Assertion (A) is false, but Reason (R) is true.
- The fixed capital method is not inherently better than the fluctuating capital method.
- The capital of the partners may be fixed in the fixed capital method, but this does not determine its superiority.
- The reason correctly states that the capital of the partners is fixed, but it inaccurately implies that all transactions are recorded in the current account.
Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.
The correct answer for this question is option 'D' - Assertion (A) is false, but Reason (R) is true.
Explanation:
To understand why the correct answer is option 'D', let's examine the given statements in detail.
Fixed Capital Method:
- In a partnership, the capital of the partners is fixed and remains constant throughout the partnership.
- Each partner's capital contribution is recorded in their respective capital accounts, which are maintained separately from the current accounts.
- The current accounts are used to record transactions related to the partner's share of profits, drawings, interest on drawings, and other adjustments.
Fluctuating Capital Method:
- In this method, the capital of the partners fluctuates based on the changes in the partnership's financial position.
- The capital accounts are adjusted periodically to reflect the changes in the partners' investments, withdrawals, profits, and losses.
- The current accounts are used to record day-to-day transactions, such as sales, purchases, and expenses.
Analysis:
- The given assertion states that the fixed capital method is better as compared to the fluctuating capital method.
- The reason provided for this assertion is that the capital of the partners is fixed, and all the transactions are recorded in the current account.
However, this assertion and reason are not entirely accurate. Here's why:
1. Capital Structure:
- The assertion assumes that the fixed capital method is superior because the capital of the partners remains constant.
- While it is true that the capital is fixed in this method, it does not necessarily make it better than the fluctuating capital method.
- The choice of capital method depends on the specific needs and circumstances of the partnership.
2. Transaction Recording:
- The reason states that all the transactions are recorded in the current account in the fixed capital method.
- This is not entirely correct. In the fixed capital method, the current accounts are used to record the partner's share of profits, drawings, interest on drawings, and other adjustments.
- The current accounts are not used to record all transactions, such as sales, purchases, and expenses, which are recorded in separate accounts.
Conclusion:
In conclusion, the correct answer is option 'D' - Assertion (A) is false, but Reason (R) is true.
- The fixed capital method is not inherently better than the fluctuating capital method.
- The capital of the partners may be fixed in the fixed capital method, but this does not determine its superiority.
- The reason correctly states that the capital of the partners is fixed, but it inaccurately implies that all transactions are recorded in the current account.
Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
|
Explore Courses for Commerce exam
|
|
Top Courses for CommerceView all
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer?
Question Description
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer?.
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer?.
Solutions for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer?, a detailed solution for Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Directions : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as:Assertion (A): The fixed capital method is better as compared to the fluctuating capital method.Reason (R): The capital of the partners is fixed, and all the transactions are recorded in the current account.a)Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).b)Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).c)Assertion (A) is true, but Reason (R) is false .d)Assertion (A) is false, but Reason (R) is true.Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice Commerce tests.
|
|
Explore Courses for Commerce exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup