The 'Price Earning' (P/E) ratio is calculated as: MCQ with Answer and Explanation

Question
The 'Price Earning' (P/E) ratio is calculated as:
A. Dividend / Market price
B. Market price / Book value
C. Earnings per share / Market price per share
D. Market price per share / Earnings per share
Answer: Option D
Solution (By JKSSB Mock Tests)
P/E ratio indicates how much investors are willing to pay per rupee of earnings.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
Which audit assesses whether management's policies and procedures are operating efficiently?
A. Cost Audit
B. Management Audit
C. Tax Audit
D. Statutory Audit
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Correct Answer: Option B

Explanation:
Management audit focuses on the efficiency, effectiveness, and performance of management processes, beyond just financial accuracy.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
The 'Advance Ruling' under GST provides:
A. Penalty imposition
B. Audit report
C. Clarity on tax liability on proposed transactions
D. Registration
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Correct Answer: Option C

Explanation:
Advance ruling helps businesses determine GST implications before undertaking a transaction.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
Which accounting concept prevents the anticipation of profits but allows recognition of all losses?
A. Realization concept
B. Prudence (Conservatism) concept
C. Consistency concept
D. Materiality concept
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Correct Answer: Option B

Explanation:
Prudence concept states that one should not anticipate profits but provide for all possible losses.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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