Concept:
Competition is an essential part of sports and physical education. It helps athletes improve their physical fitness, technical skills, confidence, strategy, and overall performance.
Through competition, athletes are able to assess their strengths and weaknesses, which contributes to continuous improvement.
Step 1: Examine Assertion (A).
The assertion states that competition helps in developing health, fitness, recreation, skill, and performance.
This statement is correct because competitive participation encourages overall physical and psychological development.
Step 2: Examine Reason (R).
The reason states that athletes evaluate their strengths and weaknesses through competition.
This statement is also correct because competition provides practical performance feedback.
Step 3: Determine whether the reason explains the assertion.
The reason correctly explains how competition contributes to improvement in fitness, skills, and performance.
Hence:
\[
\boxed{\text{Both (A) and (R) are correct and (R) is the correct explanation of (A)}}
\]
Therefore, the correct answer is:
\[
\boxed{(A)}
\]