A company's net profit before tax is ₹5,00,000, tax rate 30%. Preference dividend ₹20,000. Number of equity shares 50,000. EPS is: MCQ with Answer and Explanation

Question

A company's net profit before tax is ₹5,00,000, tax rate 30%. Preference dividend ₹20,000. Number of equity shares 50,000. EPS is:

A. ₹7.00

B. ₹6.60

C. ₹6.00

D. ₹5.60

Answer: Option B

Solution (By JKSSB Mock Tests)

PAT = 5,00,000 - 1,50,000 tax = 3,50,000. Less preference dividend 20,000 = 3,30,000. EPS = 3,30,000 / 50,000 = ₹6.60.

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Question #1

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The balance of the Cash Book represents:

A. Cash in hand and cash at bank

B. Cash in hand, cash at bank, and petty cash

C. Cash at bank only

D. Cash in hand only

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Correct Answer: Option A

Explanation:
A standard triple-column cash book records both cash in hand and cash at bank transactions, so its balance represents both.

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Question #2

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Which of the following is a 'Contingent Asset'?

A. A provision

B. A potential asset that arises from past events and whose existence will be confirmed by future events not wholly under the entity's control

C. A current asset

D. An asset recognized in balance sheet

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Correct Answer: Option B

Explanation:
Contingent asset is not recognized but disclosed if probable.

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Question #3

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Which of the following is an example of a nominal account?

A. Sundry Debtors Account

B. Bank Account

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D. Commission Received Account

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Correct Answer: Option D

Explanation:
Commission Received Account represents an income, which is a nominal account. The rule is 'Credit all incomes and gains'.

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