The 'Operating Profit' is calculated as: MCQ with Answer and Explanation

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The 'Operating Profit' is calculated as:

A. Gross profit - Operating expenses

B. Sales - Cost of goods sold

C. EBITDA - Depreciation

D. Net profit + Interest

Answer: Option A

Solution (By JKSSB Mock Tests)

Operating profit = Gross profit - Operating expenses (administrative, selling).

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

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Question #1

The concept of 'Management by Exception' is applied in:

A. Audit only

B. Tax accounting

C. Financial accounting

D. Standard costing and budgetary control

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Correct Answer: Option D

Explanation:
Management by exception focuses on significant variances between actual and standard/budgeted performance, ignoring minor deviations.

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Question #2

A distributed ledger technology providing a secure and immutable record of transactions is:

A. Blockchain Accounting

B. Tally Prime

C. ERP System

D. Cloud Accounting

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Correct Answer: Option A

Explanation:
Blockchain creates decentralized, tamper-proof ledgers, significantly reducing the scope for fraud and simplifying the auditing process.

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Question #3

The primary objective of management accounting is to:

A. Ensure compliance with accounting standards

B. Assist management in planning and decision-making

C. Calculate tax liability

D. Provide information to external stakeholders

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Correct Answer: Option B

Explanation:
Management accounting focuses on providing internal management with the financial and non-financial information needed for planning, controlling, and decision-making.

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