Q.
1
Assertion (A): When a company earns profit prior to its incorporation, it is called capital profit
Reason (R): Capital profit cannot be used for distribution as dividend to the shareholders.
In the context of the above two statements, which one of the following is correct?
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A
(A) is correct, but (R) is wrong
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B
Both (A) and (R) are correct
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C
(A) is wrong, but (R) is correct
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D
Both (A) and (R) are wrong