A high debt-equity ratio implies: MCQ with Answer and Explanation

Question Report Error

A high debt-equity ratio implies:

A. High profitability

B. Low financial risk

C. High financial risk

D. No risk

Answer: Option C

Solution (By JKExamLibrary)

Higher debt means higher fixed interest obligations, increasing financial risk.

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

Discuss this Question (0)

No comments yet. Be the first to start the discussion!

Practice More Accountancy and Book Keeping Questions

Question #1 Report Error

Business loss can be carried forward for:

A. 8 years

B. Indefinitely

C. 4 years

D. 16 years

View Answer & Solution Discuss

Correct Answer: Option A

Explanation:
Unabsorbed business loss can be carried forward for 8 assessment years immediately succeeding the assessment year in which loss was incurred.

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

Question #2 Report Error

The 'Assessment Year' is the year:

A. Same as previous year

B. In which income is earned

C. Calendar year

D. Immediately following the previous year, in which income is assessed and taxed

View Answer & Solution Discuss

Correct Answer: Option D

Explanation:
Assessment year is the year following the financial year (previous year) in which tax is computed.

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

Question #3 Report Error

In Social Accounting, an 'externality' refers to:

A. Foreign exchange transactions

B. External auditors

C. Outsourced services

D. Uncompensated impact of a firm's actions on third parties

View Answer & Solution Discuss

Correct Answer: Option D

Explanation:
Externalities (like pollution) are costs or benefits affecting society that are not reflected in traditional financial statements.

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

Explore All Accountancy and Book Keeping MCQs