Social Accounting primarily benefits: MCQ with Answer and Explanation

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Social Accounting primarily benefits:

A. Government only

B. Competitors

C. Shareholders only

D. Society at large by disclosing social costs and benefits

Answer: Option D

Solution (By JKSSB Mock Tests)

It provides information to stakeholders about the social impact of an entity.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

The 'Going Concern' evaluation period as per SA 570 is:

A. At least 12 months from the balance sheet date

B. Not defined

C. 6 months

D. Indefinite

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Correct Answer: Option A

Explanation:
Management assesses going concern for at least 12 months from the reporting date.

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Question #2

In financial management, the 'Degree of Operating Leverage' (DOL) at a given level of sales is calculated as:

A. Contribution / EBIT

B. EBIT / Net Profit

C. Sales / Contribution

D. Contribution / Net Profit

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Correct Answer: Option A

Explanation:
The Degree of Operating Leverage (DOL) measures the sensitivity of EBIT to changes in sales. It is calculated as Contribution divided by EBIT (Earnings Before Interest and Taxes).

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Question #3

Under the capitalization of super profit method, goodwill is calculated as:

A. Super Profit / Normal Rate of Return

B. Capital Employed - Super Profit

C. Super Profit * Number of Years Purchase

D. Average Profit / Normal Rate of Return

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Correct Answer: Option A

Explanation:
Capitalization of super profit determines the capital value of the excess profits by dividing Super Profit by the Normal Rate of Return.

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