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

Question
The debt-equity ratio is calculated as:
A. Total Assets / Shareholders' Equity
B. Long-term Debts / Shareholders' Equity
C. Current Liabilities / Shareholders' Equity
D. Total Debts / Shareholders' Equity
Answer: Option B
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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Practice More Accountancy and Book Keeping Questions

Question #1
A Trial Balance will not disclose which error?
A. Omission to post one side of an entry
B. Error of casting
C. Wrong totaling of subsidiary book
D. Compensating errors
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Correct Answer: Option D

Explanation:
Compensating errors cancel each other's effect on trial balance totals, so the trial balance still agrees. Errors of casting, posting one side, wrong totaling will cause disagreement.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
The 'Cash Book' serves as:
A. Both journal and ledger for cash transactions
B. Only a ledger
C. A subsidiary book for all transactions
D. Only a journal
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Correct Answer: Option A

Explanation:
Cash book records all cash and bank transactions, functioning as journal (original entry) and ledger.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Guillotine' in budget process refers to:
A. Adjournment of house
B. Rejection of budget
C. Putting all outstanding demands to vote without further discussion
D. Alloting extra time for discussion
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Correct Answer: Option C

Explanation:
Guillotine is a parliamentary procedure to close discussion on demands for grants and put them to vote.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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