A company's earnings before interest and tax (EBIT) is ₹2,00,000. It has 12% debentures of ₹5,00,000. The interest coverage ratio is: MCQ with Answer and Explanation
Explanation:
Secret reserves are created by undervaluing assets or overvaluing liabilities, which reduces reported profits and hides the true financial position.
Under the Written Down Value (WDV) method, if the rate of depreciation is 10% and the original cost is ₹10,000, what is the depreciation for the second year?
S1: Capital expenditure increases the earning capacity of the business. S2: Revenue expenditure maintains the earning capacity of the business. Which statement(s) is/are correct?
Explanation:
Capital expenditure is incurred to acquire or improve assets, thereby increasing earning capacity. Revenue expenditure is incurred for day-to-day operations to maintain the existing earning capacity. Both statements are correct.
No comments yet. Be the first to start the discussion!