An asset which is not ficitious but intangible in nature, having realisable value is :
  • Machinery
  • Building
  • Furniture
  • Goodwill
Which of the following is not a method of valuation of Goodwill:
  • Revaluation Method
  • Average Profit Method
  • Super Profit Method
  • Capitalisation Method
The excess of average profits over the normal profits are called :
  • Super Profits
  • Fixed Profits
  • Abnormal Profits
  • Normal Profits
Goodwill is a…………….asset
  • Useless
  • Tangible
  • Worthless
  • Valuable
Under super profit basis goodwill is calculated by :
  • No. of years’ purchased x Average Profit
  • No. of years’ purchased x Super profit
  • Super profit -r Expected rate of return
  • None of these
Profits of the last three years were ₹ 6,000, ₹ 13,000 and ₹ 8,000 respectively. Goodwill at two years purchase of the average net profit will be :
  • ₹ 81,000
  • ₹ 27,0000
  • ₹ 9,000
  • ₹ 18,000
What do you mean by Super Profit ?
  • Total Profit/No. of Years
  • Average Profit – Normal Profit
  • Weighted Profit/No. of Years’ Purchase
  • None of these
Capital employed in a business is ₹ 1,50,Profits are ₹ 50,000 and the normal rate of profit is 20%. The amount of goodwill as per capitalisation method will be:
  • ₹ 2,00,000
  • ₹ 1,50,000
  • ₹ 3,00,000
  • ₹ 1,00,000
Weighted average method of calculating goodwill is used when:
  • Profits are equal
  • Profit has increasing trend
  • Profit has decreasing trend
  • Either (b) or (c)
The monetary value of reputation of the business is called:
  • Goodwill
  • Super Profit
  • Surplus
  • Abnormal Profit
A firm has an average profit of ₹ 60,000 Rate of return on capital employed is 12.5% p.a. Total capital employed in the firm was ₹ 4,00,Goodwill on the basis of two years purchase of super profit is :
  • ₹ 20,000
  • ₹ 15,000
  • ₹ 10,000
  • None of these
Under capitalisation method, goodwill is calculated by :
  • Average Profit x No. of Years’ Purchase
  • Super Profit x No. of Years’ Purchase
  • Total of the discounted value of expected future benefits
  • Super Profit -r Expected Rate of Return
“Goodwill is nothing more than probability that the old customer will resort to the old place.” This definition of goodwill was given by :
  • Spicer and Pegler
  • ICAI
  • Lord Eldon
  • AICPA
What will be the value of goodwill at twice the average of last three years profit if the profits of the last three years were ₹ 4,000, ₹ 5,000 and ₹ 6,000 ?
  • ₹ 5,000
  • ₹ 10,000
  • ₹ 8,000
  • None of these
The Valuation of Goodwill is not necessary in Sole Trading:
  • On selling the Firm
  • On making a partner
  • On estimation of Assets
  • On Closing the Firm
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