Financial and Management Accounting

1: Assertion (A) .A new firm can be profitable and yet not be able to pay its debts as they become due. Reason (R). New firms often have the problem of having increased investments in inventory and fixed assets at an amount which exceeds cash generated from operations.
A.
Both A and R are true and R is the correct explanation of A.
B.
Both A and R are true but R is not a correct explanation of A.
C.

A is true but R is false

D.

A is false but R is true.

 

Answer : A

Explanation :

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Option: A

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