AI-generated practice question — model-generated for extra practice, not a previous-year CBSE board question.
Option A is correct. Both A and R are true, and R is the correct explanation of A. Demand deposits can be withdrawn on demand and payments made via cheques, making them a medium of exchange, hence a form of money.
The textbook (Chapter 3 – Deposits with Banks) explicitly states: "Since deposits in bank accounts can be withdrawn on demand, these deposits are called demand deposits" and "the facility of cheques against demand deposits makes it possible to directly settle payments without the use of cash." This is precisely why demand deposits are considered money — the reason (cheque facility + withdrawal on demand = medium of exchange) directly explains the assertion. So A is the correct option.