The 'Return on Investment' (ROI) formula is: MCQ with Answer and Explanation

Question
The 'Return on Investment' (ROI) formula is:
A. Gross profit / Sales
B. Sales / Capital employed
C. Net profit / Capital employed
D. Net profit / Sales
Answer: Option C
Solution (By JKSSB Mock Tests)
ROI = Net profit before interest and tax / Capital employed, or sometimes PAT/CE. Typically, Net profit / Capital employed.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Practice More Accountancy and Book Keeping Questions

Question #1
Goods distributed as free samples are debited to:
A. Sales Account
B. Purchases Account
C. Advertisement Account
D. Drawings Account
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Correct Answer: Option C

Explanation:
Free samples are treated as advertising expense.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
In partnership, the guarantee of profit to a partner is given by:
A. The government
B. The auditor
C. The other partners
D. The firm
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Correct Answer: Option C

Explanation:
A guarantee of minimum profit to a partner is given by the other partners or the firm as a whole, and any deficiency is borne by the guarantor(s).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The Trading Account shows a gross profit of Rs 50,000. Indirect expenses are Rs 20,000 and indirect income is Rs 5,000. What is the Net Profit?
A. Rs 30,000
B. Rs 35,000
C. Rs 25,000
D. Rs 75,000
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Correct Answer: Option B

Explanation:
Net Profit = Gross Profit (50,000) + Indirect Income (5,000) - Indirect Expenses (20,000) = Rs 35,000.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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