The correct answer is: A. Both A and R are correct and R is the correct explanation of A.
The assertion (A) is correct because in double account system, the final accounts of a company fails to disclose the true condition of its assets. This is because the assets of the company are shown at their cost price even when they are completely worn out. The reason (R) is also correct because the assets of the company are shown at their cost price even when they are completely worn out. This is because the double account system does not take into account the depreciation of assets.
The reason (R) is the correct explanation of the assertion (A) because the reason explains why the assertion is true. The assertion is true because the reason is true.
Here is a more detailed explanation of each option:
- Option A: Both A and R are correct and R is the correct explanation of A. This is the correct answer because the assertion (A) is correct and the reason (R) is correct, and the reason is the correct explanation of the assertion.
- Option B: Both A and R are correct but R is not the correct explanation of A. This is not the correct answer because the reason (R) is the correct explanation of the assertion.
- Option C: A is true but R is false. This is not the correct answer because the reason (R) is true.
- Option D: A is false but R is true. This is not the correct answer because the assertion (A) is true.