Question

There are two statements Assertion (A) and Reason (R):
Assertion (A): At the time of admission of a new partner in a partnership firm, the newly admitted partner brings an agreed amount of capital either in cash or in kind.
Reason (R): On admission, the new partner gets the right to acquire share in the assets and profits of the partnership firm.
Choose the correct option from the following:

• A. Both Assertion (A) and Reason (R) are correct and Reason (R) is the correct explanation of Assertion (A).
• B. Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).
• C. Assertion (A) is correct, but Reason (R) is incorrect.
• D. Assertion (A) is incorrect, but Reason (R) is correct.

Hint:

In assertion-reason questions:

• First check if both statements are factually correct.
• Then check if the reason truly explains the assertion.
• The new partner brings capital to compensate existing partners for their share, not merely because they get rights to profits.

Answer 1

The Correct Option is B

We need to evaluate the Assertion and Reason and determine their correctness and relationship.
Step 1: Analyze Assertion (A).
\textit{"At the time of admission of a new partner in a partnership firm, the newly admitted partner brings an agreed amount of capital either in cash or in kind."}

• When a new partner is admitted, they are required to bring in their share of capital as agreed upon by all partners.
• This capital can be brought in cash or in kind (assets other than cash).
• This is a standard practice in partnership admission.

Therefore, Assertion (A) is correct. Step 2: Analyze Reason (R).
\textit{"On admission, the new partner gets the right to acquire share in the assets and profits of the partnership firm."}

• When a new partner is admitted, they become entitled to a share in the future profits of the firm.
• They also acquire a right to share in the assets of the firm (subject to adjustments).
• This is the fundamental reason why a new partner is admitted and why they bring capital.

Therefore, Reason (R) is also correct. Step 3: Determine if Reason (R) is the correct explanation of Assertion (A).

• Assertion (A) states that the new partner brings capital.
• Reason (R) states that the new partner gets a right to share in assets and profits.
• While Reason (R) explains why a person would want to become a partner, it does not directly explain why they must bring capital.
• The new partner brings capital to compensate the existing partners for the share they are giving up and to contribute to the firm's resources.
• Reason (R) is a general statement about the rights of a new partner, not a direct explanation of why they bring capital.

Therefore, Reason (R) is correct but not the correct explanation of Assertion (A). Step 4: Match with the options.
Both A and R are correct, but R is not the correct explanation of A \(\Rightarrow\) Option (B). Final Answer: (B) Both Assertion (A) and Reason (R) are correct, but Reason (R) is not the correct explanation of Assertion (A).