The debt-equity ratio is calculated as: MCQ with Answer and Explanation

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The debt-equity ratio is calculated as:

A. Current Liabilities / Shareholders' Equity

B. Total Debts / Shareholders' Equity

C. Total Assets / Shareholders' Equity

D. Long-term Debts / Shareholders' Equity

Answer: Option D

Solution (By JKSSB Mock Tests)

The debt-equity ratio typically measures long-term solvency and is calculated as Long-term Debts divided by Shareholders' Equity.

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

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Question #1

Which of the following is not a feature of a company?

A. Unlimited liability

B. Separate legal entity

C. Common seal

D. Perpetual succession

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Correct Answer: Option A

Explanation:
Company has limited liability, not unlimited.

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

Question #2

Which of the following is a recent development in accounting?

A. Blockchain-based triple-entry accounting

B. Paper vouchers

C. Handwritten journals

D. Manual ledger posting

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Correct Answer: Option A

Explanation:
Blockchain is an emerging technology enabling triple-entry accounting, enhancing transparency and security.

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

Question #3

Which of the following statements about a 'Voucher' is incorrect?

A. A voucher is a documentary evidence of a transaction.

B. A credit voucher is used for recording non-cash transactions.

C. A debit voucher is prepared for cash payments.

D. A journal voucher is used for recording depreciation.

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Correct Answer: Option B

Explanation:
Credit voucher is used for cash receipts, not non-cash transactions. Non-cash are recorded via journal/transfer vouchers.

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

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