Assertion statement 1- When static friction acts, there is no loss of mechanical energy.
Reason statement 2- When kinetic friction acts between two bodies there is loss of mechanical energy.
A. Both statements 1 and 2 are true and Statement 2 is the correct explanation of statement 1.
B. Both statements 1 and 2 are true but Statement 2 is not the correct explanation of statement 1.
C. Statement 1 is true but Statement 2 is false.
D. Statement 1 is false but Statement 2 is true.

Hint:In static friction, an object rolls but does not slip, hence negating any kind of energy loss. Dynamic friction (also called kinetic friction) acts when two bodies rub (or slide) over each other. Also, remember, both above said types are separate forms of friction.

Complete answer:
Friction is an opposing force that comes into play when the surfaces of two bodies are in contact and there is some relative motion between the surfaces.Static friction between two bodies is a type of friction that acts on the bodies when we try to bring a relative motion between the surfaces of the bodies. When static friction acts the bodies, they are at rest with respect to one another.

However, static friction has a limiting value. If the applied force exceeds a certain value such that the static fiction cannot hold the bodies and they move apart from each other, then is when kinetic friction comes into play. During kinetic friction there is a relative motion between the bodies.Therefore, there is no loss of mechanical energy in static friction because there is no relative motion between the bodies and friction does do any work on the system.

While in kinetic friction there is a loss of mechanical energy as it occurs when two bodies rub/move in opposite directions over each other, due to which friction will do some negative work on the system. This means that both statements 1 and 2 are true. However, statement 2 is not the correct explanation of statement 1.

Hence, the correct option is B.

Note:Keep in mind that although both the statements are true, they do not depend on each other. Both static and kinetic friction and two different forms of friction and are irrespective of each other. Hence, neither of the two statements is the reason for the other.