Banking · Accounting Standards
Statement A: The accrual basis of accounting is a fundamental accounting assumption as per AS 1, which implies that revenues and costs are recognized as they are earned or incurred and recorded in the financial statements of the periods to which they relate. Reason R: Commercial banks in India are permitted to follow the cash basis of accounting for income recognition on non-performing assets (NPAs) based on the RBI guidelines of prudence.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A is false, but R is true.
- 2A is true, but R is false.
- 3Both A and R are true, but R is not the correct explanation of A.✓
- 4Both A and R are true, and R is the correct explanation of A.
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Both A and R are true, but R is not the correct explanation of A.
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