Biochemical oxygen demand or BOD is the amount of oxygen required by bacteria to decompose organic matter in one litre of polluted water. So, the biodegradable organic matter present in water is measured by BOD of water. Hence, assertion is correct.
During biodegradation of organic compounds, carbon dioxide is released if degradation occurs in presence of oxygen while methane is released if degradation occurs in absence of oxygen. Hence, reason is incorrect.
So, the correct answer is 'Assertion is correct but Reason is incorrect'.