Assertion (A): Increasing the value of closing inventory increases profit. Reason (R): Increasing the value of closing inventory reduces the cost of goods sold In the context of the above two statements, which of the following is correct?

The correct answer is: C. Only (R) is correct.

Assertion (A) is incorrect. Increasing the value of closing inventory does not necessarily increase profit. Profit is calculated as revenue minus cost of goods sold. If the value of closing inventory increases, the cost of goods sold will decrease, which will increase profit. However, there are other factors that can affect profit, such as changes in revenue or expenses.

Reason (R) is correct. Increasing the value of closing inventory reduces the cost of goods sold. This is because the cost of goods sold is calculated as the cost of goods available for sale minus the value of closing inventory. If the value of closing inventory increases, the cost of goods sold will decrease.

Therefore, only reason (R) is correct.