Assertion A The financial statements prepared on historical cost basis result into an erosion of cap...........

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Assertion (A) : The financial statements prepared on historical cost basis result into an erosion of capital in the long run. (2 marks)

Reason (R) : Maintaining the books of accounts as per Current Purchasing Power Technique only may contain the inflationary pressure.

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

Both (A) and (R) are true and (R) is the correct explanation of (A).

Both (A) and (R) are true, but (R) is not the correct explanation of (A).

(A) is true, but (R) is false.

(A) is false, but (R) is true.

(A) is true, but (R) is false.

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