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

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



  • A

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


  • B

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


  • C

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


  • D

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