The 'Interest Coverage Ratio' is: MCQ with Answer and Explanation

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The 'Interest Coverage Ratio' is:

A. EBIT / Interest

B. Sales / Interest

C. Equity / Interest

D. Net profit / Interest

Answer: Option A

Solution (By JKSSB Mock Tests)

Interest coverage ratio = Earnings before interest and taxes (EBIT) / Interest expense.

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

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Question #1

The 'GST on Affordable Housing' under the new regime is:

A. 1% without ITC

B. 12%

C. Exempt

D. 5%

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Correct Answer: Option A

Explanation:
GST for affordable housing is 1% without input tax credit.

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

Question #2

'Earnings Per Share' is computed under:

A. AS 19

B. AS 20

C. AS 22

D. AS 21

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Correct Answer: Option B

Explanation:
AS 20 prescribes the calculation and presentation of EPS.

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Question #3

The journal entry for goods withdrawn by the proprietor for personal use is:

A. Drawings A/c Dr. To Sales A/c

B. Purchases A/c Dr. To Drawings A/c

C. Capital A/c Dr. To Purchases A/c

D. Drawings A/c Dr. To Purchases A/c

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Correct Answer: Option D

Explanation:
Goods taken for personal use reduce drawings and reduce purchases (or stock). Correct entry: Drawings A/c Dr. To Purchases A/c.

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

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