Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R):
Assertion (A) : After reissue of all the forfeited shares, balance left in Forfeited Shares Account is transferred to General Reserve Account.
Reason (R) : Gain on reissue of forfeited shares is of revenue nature that is why it is transferred to General Reserve A/c.
In the context of the above statements, which one of the following is correct?
1
Both (A) and (R) are true, but (R) is not the correct explanation of (A)
2
Both (A) and (R) are true and (R) is a correct explanation of (A).
3
Both (A) and (R) are false.
4
(A) is true, but (R) is false.