A: Cash-based accounting records transactions only when cash is received or paid. R: Cash-based accounting provides a true and fair view of the financial position. Choose the correct option.
A. Both A and R are true and R is the correct explanation of A
B. A is true but R is false
C. A is false but R is true
D. Both A and R are true but R is NOT the correct explanation of A
Answer: Option B
Solution (By JKSSB Mock Tests)
Cash-based accounting only records cash inflows and outflows. It does not record credit transactions or outstanding/prepaid items, hence it fails to provide a true and fair view of the financial position. A is true, R is false.
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