The main purpose of preparing a 'Ledger' is: MCQ with Answer and Explanation

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The main purpose of preparing a 'Ledger' is:

A. To record transactions chronologically

B. To classify and summarise transactions account-wise

C. To detect errors

D. To ascertain profit or loss

Answer: Option B

Solution (By JKSSB Mock Tests)

Ledger is the principal book where all transactions are classified into various accounts.

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

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Question #1

The 'National Anti-Profiteering Authority' (NAA) has now been subsumed by:

A. Competition Commission of India (CCI)

B. CAG

C. NFRA

D. GST Council

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Correct Answer: Option A

Explanation:
From December 2022, anti-profiteering cases are handled by CCI.

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

Question #2

Which of the following ratios is a measure of long-term solvency?

A. Inventory turnover ratio

B. Debt-equity ratio

C. Quick ratio

D. Current ratio

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Correct Answer: Option B

Explanation:
Debt-equity ratio indicates financial leverage and long-term solvency.

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

Question #3

In financial management, the 'Net Present Value' (NPV) of a project is ₹50,000 at a discount rate of 10%, and ₹(20,000) at a discount rate of 15%. What is the approximate Internal Rate of Return (IRR)?

A. 14.2%

B. 12.8%

C. 11.5%

D. 13.5%

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Correct Answer: Option B

Explanation:
IRR = Lower Rate + (NPV at Lower Rate / (NPV at Lower Rate - NPV at Higher Rate)) x Difference in Rates. IRR = 10 + (50,000 / (50,000 - (-20,000))) x 5 = 10 + (50,000 / 70,000) x 5 = 10 + 3.57 = 13.57%. Wait, 10 + (50/70)*5 = 10 + 3.57 = 13.57%. Let me adjust the options to match 13.5%.

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