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

The 'Return on Equity' (ROE) is computed as:

A. EBIT / Equity

B. Net profit / Shareholders' equity

C. Gross profit / Equity

D. Net profit / Total assets

Answer: Option B

ROE measures return to equity shareholders.

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

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Question #1 Report Error

Which of the following is not a column in a three-column cash book?

A. Journal folio

B. Bank

C. Discount

D. Cash

Correct Answer: Option A

Explanation:
Three-column cash book has discount, cash, and bank columns. Journal folio is not a column; ledger folio might appear.

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

Question #2 Report Error

The final step in the accounting cycle is:

A. Journalizing

B. Preparation of financial statements

C. Posting to ledger

D. Preparation of trial balance

Correct Answer: Option B

Explanation:
The accounting cycle ends with the preparation of financial statements from the trial balance and adjustments.

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

Question #3 Report Error

Marginal cost is the cost of:

A. Producing one additional unit

B. Fixed costs

C. Producing one unit

D. Total cost divided by units

Correct Answer: Option A

Explanation:
Marginal cost is the change in total cost due to producing one additional unit.

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