Which ratio measures the profitability of a business relative to shareholders' funds? MCQ with Answer and Explanation

Question
Which ratio measures the profitability of a business relative to shareholders' funds?
A. Current ratio
B. Net profit ratio
C. Gross profit ratio
D. Return on equity (ROE)
Answer: Option D
Solution (By JKSSB Mock Tests)
ROE = Net Profit / Shareholders' Equity. It measures how effectively management is using equity to generate profit.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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Question #1
When a firm is dissolved, unrecorded assets taken over by a partner are recorded by:
A. Debiting Realisation A/c, Crediting Partner's Capital A/c
B. Debiting Cash, Crediting Realisation
C. Ignored
D. Debiting Partner's Capital A/c, Crediting Realisation A/c
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Correct Answer: Option D

Explanation:
Taking an asset reduces the amount payable to the partner (debit capital) and is treated as a realization of asset value (credit Realisation A/c).
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #2
In the absence of an agreement, what is the profit-sharing ratio among partners?
A. Time devoted to business
B. As decided by the senior partner
C. Capital Ratio
D. Equal
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Correct Answer: Option D

Explanation:
Under the Indian Partnership Act, 1932, if the deed is silent, all partners share profits and losses equally.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
Question #3
The 'GST Refund' for unutilised ITC due to inverted duty structure is available for:
A. All goods
B. Services
C. Goods where input tax rate is higher than output tax rate, subject to certain exclusions
D. All zero-rated supplies
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Correct Answer: Option C

Explanation:
Refund of accumulated ITC due to inverted rate structure is allowed for goods, with some exceptions.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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