Question : Assertion A :-  Price level changes and the purchasing power of money are inversely related. A change in the price level makes analysis of financial statements of different accounting years invalid.

Reason R :- Accounting records ignore changes in the value of money.

In the context of the above two statements, which of the following is correct?

Option 1: Both Assertion A and reason R are correct but the reason R is not the correct explanation of Assertion A 

Option 2: Both Assertion A and reason R are correct but the reason R is the correct explanation of Assertion A 

Option 3: Both Assertion A is correct but the reason R is not correct

Option 4: Both Assertion A and reason R are not correct

Question : Assertion A :-  Price level changes and the purchasing power of money are inversely related. A change in the price level makes analysis of financial statements of different accounting years invalid.

Reason R :- Accounting records ignore changes in the value of money.

In the context of the above two statements, which of the following is correct?

Option 1: Both Assertion A and reason R are correct but the reason R is not the correct explanation of Assertion A 

Option 2: Both Assertion A and reason R are correct but the reason R is the correct explanation of Assertion A 

Option 3: Both Assertion A is correct but the reason R is not correct

Option 4: Both Assertion A and reason R are not correct

Question : Choose which of the following statements is not true.

Option 1: There may be variations in accounting practices followed by different firms, a meaningful comparison of their financial statements is not possible.

Option 2: Window dressing refers to the presentation of a better financial position than what it actually is by manipulating the books of account.

Option 3: Financial analysis does not identify symptoms of the problems.

Option 4:  All of the above

Question : Statement 1: In management accounting, data from cost accounting and financial accounting are both used.
Statement 2: Therefore, a suitable system is required to combine cost accounts and financial accounts.

Option 1: Both the statements are true

Option 2: Both the statements are false

Option 3: Statement 1 is true and statement 2 is false

Option 4: Statement 1 is false and statement 2 is true

Question : Statement 1: For efficient analysis and interpretation, the financial accounting data is categorised and codified.
Statement 2: The accounts are categorised according to their nature.

Option 1: Both the statements are true

Option 2: Both the statements are false

Option 3: Statement 1 is true and statement 2 is false

Option 4: Statement 1 is false and statement 2 is true