The 'Emphasis of Matter' vs 'Other Matter' paragraph: Emphasis of Matter refers to: MCQ with Answer and Explanation

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The 'Emphasis of Matter' vs 'Other Matter' paragraph: Emphasis of Matter refers to:

A. Scope limitation

B. Matters not presented or disclosed in the financial statements

C. Matters appropriately presented or disclosed in the financial statements that are fundamental to users' understanding

D. Matters that require a modified opinion

Answer: Option C

Solution (By JKSSB Mock Tests)

Emphasis of Matter highlights a note/disclosure already in financial statements.

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

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Practice More Accountancy and Book Keeping Questions

Question #1

Which of the following transactions will not affect the total of the Balance Sheet?

A. Purchase of machinery on credit

B. Sale of goods on credit at a profit

C. Payment to a creditor

D. Cash deposited into bank

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Correct Answer: Option D

Explanation:
Cash to bank is just a change in composition of assets; total assets unchanged. Other transactions change total assets/liabilities.

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

Question #2

A and B share profits 3:2. They admit C for 1/5th share. C brings ₹50,000 as capital and ₹20,000 as goodwill. Goodwill is withdrawn by old partners. The amount credited to A's capital for goodwill will be:

A. ₹12,000

B. ₹10,000

C. ₹20,000

D. ₹8,000

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Correct Answer: Option A

Explanation:
Goodwill brought by C is distributed in sacrificing ratio, which is old ratio 3:2. A's share = 20,000 * 3/5 = ₹12,000.

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Question #3

The 'Return on Equity' (ROE) is computed as:

A. Gross profit / Equity

B. Net profit / Total assets

C. Net profit / Shareholders' equity

D. EBIT / Equity

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Correct Answer: Option C

Explanation:
ROE measures return to equity shareholders.

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

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