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

Question
The 'Return on Equity' (ROE) is computed as:
A. EBIT / Equity
B. Net profit / Total assets
C. Gross profit / Equity
D. Net profit / Shareholders' equity
Answer: Option D
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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Practice More Accountancy and Book Keeping Questions

Question #1
The 'GST Council' decisions require how much majority?
A. Unanimous
B. Simple majority of members present
C. Two-thirds majority
D. Three-fourths of weighted votes
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Correct Answer: Option D

Explanation:
As per Article 279A, decisions are by majority of not less than three-fourths of weighted votes of members present and voting, with Union's weight one-third and states' two-thirds.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
Notes to Accounts are provided to:
A. Replace the Trial Balance
B. Provide detailed disclosures and accounting policies
C. Calculate daily cash flow
D. Make the balance sheet look longer
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Correct Answer: Option B

Explanation:
Notes to Accounts offer detailed breakdowns, accounting policies, and explanatory information supporting the numbers in the financial statements.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
According to the accounting equation, if a business borrows ₹50,000 from bank, then:
A. Assets increase, capital increase
B. Assets increase, liabilities increase
C. Assets decrease, liabilities increase
D. Assets decrease, capital decrease
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Correct Answer: Option B

Explanation:
Cash (asset) increases, and bank loan (liability) increases.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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