The gross profit ratio is 25%. If sales are ₹4,00,000, what is the cost of goods sold? MCQ with Answer and Explanation

Question
The gross profit ratio is 25%. If sales are ₹4,00,000, what is the cost of goods sold?
A. ₹1,00,000
B. ₹5,00,000
C. ₹3,00,000
D. ₹4,00,000
Answer: Option C
Solution (By JKSSB Mock Tests)
Gross Profit = 25% of 4,00,000 = ₹1,00,000. COGS = Sales - Gross Profit = 4,00,000 - 1,00,000 = ₹3,00,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
A trial balance shows the following: Debtors ₹50,000; Provision for doubtful debts ₹5,000. It is decided to maintain provision at 10% of debtors. The amount to be charged to Profit & Loss Account will be:
A. ₹2,500
B. Nil
C. ₹5,000
D. ₹10,000
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Correct Answer: Option B

Explanation:
Required provision = 10% of 50,000 = 5,000. Existing provision is also ₹5,000. So no additional charge needed. Thus, nil.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Which of the following is an example of a fixed cost?
A. Carriage outward
B. Direct material
C. Factory rent
D. Direct labour (piece rate)
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Correct Answer: Option C

Explanation:
Factory rent remains constant irrespective of production volume, hence fixed cost.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'Employee Benefits' (Ind AS 19) includes:
A. Only gratuity
B. Short-term benefits, post-employment benefits, other long-term benefits, termination benefits
C. Only wages
D. Only pension
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Correct Answer: Option B

Explanation:
Ind AS 19 covers various types of employee benefits.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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