ASSERTION: Capital receipts neither create a liability nor involve a reduction in the value of fixed assets. REASONING: Capital receipts are shown on the liabilities side of the Balance Sheet.

Question

KollegeApply · Accepted Answer

A is false, but R is true. Explanation: A is incorrect because capital receipts either create a liability (e.g., loans) or reduce fixed assets (sale proceeds). R is correct because such receipts (capital introduced, long‑term loans) appear on the liabilities/equity side of the Balance Sheet.

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