Assertion (A): Balance Sheet of a Company is prepared on a particular date. Reason (R): Statement of Profit and Loss of a Company is prepared for a particular period. In the context of the above two statements, which of the following is correct?

Question

KollegeApply · Accepted Answer

Both (A) and (R) are true, but (R) is not the correct explanation of (A). Explanation: A Balance Sheet is a statement of financial position prepared “as at” a particular date (a snapshot), whereas the Statement of Profit and Loss shows the financial performance “for a particular period”; the fact that P&L is for a period does not explain why the Balance Sheet is prepared at a date.

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