In ratio analysis, 'Stock Turnover Ratio' indicates: MCQ with Answer and Explanation
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Question #1
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The 'Engagement Risk' is different from audit risk; it relates to:
Correct Answer: Option C
Explanation:
Engagement risk is a business risk for the auditor.
Engagement risk is a business risk for the auditor.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #2
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Which of the following adjustments would not affect the net profit of a sole trader?
Correct Answer: Option D
Explanation:
Interest on drawings is an appropriation of profit in sole proprietorship? Actually in sole proprietorship, drawings are not subject to interest unless specifically decided for managerial accounting. But in financial accounting for sole traders, interest on drawings is not charged to P&L. It reduces capital directly if considered. So it does not affect net profit. Others affect P&L.
Interest on drawings is an appropriation of profit in sole proprietorship? Actually in sole proprietorship, drawings are not subject to interest unless specifically decided for managerial accounting. But in financial accounting for sole traders, interest on drawings is not charged to P&L. It reduces capital directly if considered. So it does not affect net profit. Others affect P&L.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
Question #3
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In cost accounting, the term 'Opportunity Cost' means:
Correct Answer: Option D
Explanation:
Opportunity cost is the potential benefit that is given up when one alternative is selected over another.
Opportunity cost is the potential benefit that is given up when one alternative is selected over another.
This question belongs to:
Accountancy and Statistics
Accountancy and Book Keeping
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