The 'Return on Equity' (ROE) is computed as: MCQ with Answer and Explanation

Question

Share Report Error

The 'Return on Equity' (ROE) is computed as:

A. Gross profit / Equity

B. Net profit / Total assets

C. Net profit / Shareholders' equity

D. EBIT / Equity

Answer: Option C

Solution (By JKSSB Mock Tests)

ROE measures return to equity shareholders.

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

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Question #1

The 'Fair Value' measurement is a key feature of:

A. Cash basis accounting

B. Partnership Act

C. Ind AS

D. Income Tax Act

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Correct Answer: Option C

Explanation:
Ind AS extensively uses fair value for financial instruments, investment property, etc.

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Question #2

In case of a partnership firm, the liability of partners is:

A. Unlimited and joint and several

B. Limited to capital

C. Limited

D. Unlimited but proportionate

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Correct Answer: Option A

Explanation:
In a general partnership, partners have unlimited liability, jointly and severally, for firm's debts.

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

Question #3

The 'Emphasis of Matter' paragraph in audit report is used to:

A. Give adverse opinion

B. Qualify the opinion

C. Disclaim opinion

D. Draw attention to a matter appropriately presented or disclosed that is fundamental to users' understanding

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Correct Answer: Option D

Explanation:
Emphasis of Matter does not affect the audit opinion; it highlights significant matters.

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

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