The formula for debt-equity ratio is: MCQ with Answer and Explanation

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The formula for debt-equity ratio is:

A. Total debt / Total assets

B. Long-term debt / Shareholders' funds

C. Current liabilities / Equity

D. Short-term debt / Equity

Answer: Option B

Solution (By JKSSB Mock Tests)

Debt-equity ratio = Long-term debt / Shareholders' funds (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

The 'GST' on sale of used cars by a registered person is:

A. 5% on margin

B. Taxable at 18% on margin (if no ITC taken) or on value

C. Exempt

D. Nil

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Correct Answer: Option B

Explanation:
GST on sale of used vehicles by registered persons is 18% on margin (difference between purchase and selling price) if no ITC taken; otherwise on value.

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

Question #2

The 'GST Audit' by tax authorities (Section 65) has been replaced by:

A. Internal audit

B. Only CAG audit

C. Reconciliation of returns and information

D. No audit

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Correct Answer: Option C

Explanation:
Finance Act 2021 removed the mandatory GST audit by CA/CWA and replaced with self-certification and department's scrutiny.

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Question #3

Which of the following errors will affect the Trial Balance?

A. One-sided error

B. Error of omission

C. Error of commission

D. Error of principle

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Correct Answer: Option A

Explanation:
A one-sided error (e.g., posting to only one account) causes disagreement in trial balance. Other errors may not affect the trial balance agreement.

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

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