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Commerce Accounting Difficulty: Medium

Direction-The question have two statements. One is labelled as Assertion (A) and the other as Reason (R) . You have to examine both the statements carefully and decide whether Assertion (A) and Reason (R) separately are true and if so then reason is the correct explanation of the assertion. Mark these items on the answer sheet. Assertion (A): Interest payable on working capital should be treated as an item of operating expenses. Reason (R): Interest is the cost of capital used in the business.

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