Teaching UGC NET Mock Test Series 2025 (Paper 1 & 2) Accountancy Financial Statement Analysis Ratio analysis
Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R). Read the statements and choose the correct answer using the code given below
Assertion (A): A low debt-equity ratio is generally recommended for a newly started business.
Reason (R): During the initial years of the business, debt servicing will prove to be less burdensome.
1
Both (A) and (R) are correct and (R) is the correct explanation of (A)
2
Both (A) and (R) are correct but (R) is not the correct explanation of (A)
3
(A) is correct but (R) is not correct
4
(A) is not correct but (R) is correct