The profits of last 5 years are Rs.75,000, Rs.90,000, Rs.80,000, Rs.1,00,000 and Rs.80,000. Find the value of goodwill, if its calculated an average profits of last 5 years on the basis of 3 years of purchase :
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Question 2 of 30
2. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
Capital employed in a business is Rs.1,50,000. Profits are Rs.50,000 and the normal rate of profit is 20%. The amount of goodwill as per capitalization method will be :
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Question 3 of 30
3. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
A firm has an average profit of Rs.60,000. Rate of return on Capital employed is Rs.12.5% p.a. Total capital employed in the firm was Rs.4,00,000. Goodwill on the basis of 2 years purchase of super profits is :
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Question 4 of 30
4. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
Weighted average method is calculating goodwill is used when :
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Question 5 of 30
5. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
X and Y are partners in a firm with capital of Rs.18,000 and Rs.20,000. Z was admitted for 1/3rd share in profits and brings Rs.24,000 as capital, calculate the amount goodwill :
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Question 6 of 30
6. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
Goodwill is to be calculated at 1.5 years of purchase of average profit of last 6 years. Profit earned during the first 3 years is Rs.30,000, Rs.20,000 and Rs.20,000 and losses suffered of Rs.5,000, Rs.3,000 and Rs.2,000 in the last three years. Goodwill will be :
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Incorrect
Question 7 of 30
7. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
A firm earned net profits during last 3 years as follows :
2001 Rs.15,000
2002 Rs.20,000
2003 Rs.25,000
The capital investment in the firm is Rs.1,00,000. Having regard to risk involved 15% is the fair return on capital employed. Goodwill on basis of 2 years purchase of average Super profits earned during 3 years is :
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Question 8 of 30
8. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
What do you mean by purchasing years ?
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Question 9 of 30
9. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
What do you mean by Super Profit ?
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Question 10 of 30
10. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
The profits of last four years are :
2000 Rs.40,000
2001 Rs.50,000
2002 Rs.60,000
2003 Rs.50,000
The value of goodwill on the basis of 3 years purchase of average profits based on last 4 years :
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Incorrect
Question 11 of 30
11. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
Under Capitalization basis goodwill is calculated by :
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Question 12 of 30
12. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
Goodwill is to be calculated at one and half years purchase of average profit of last 5 years. The firm earned profits during first 3 years as, Rs.20,000, Rs.18,000 and Rs.9,000 and suffered losses of Rs.2,000 and 5,000 in last 2 years. Goodwill amount will be :
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Incorrect
Question 13 of 30
13. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
Extra amount over and above the saleable values of the identifiable assets that could be fetched by selling an existing firm as a going concern .
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Question 14 of 30
14. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
A firm earned net profits during last 3 years :
2004 Rs.17,000
2005 Rs.20,000
2006 Rs.23,000
The Capital employed Rs.80,000. Return on capital employed 15%. Calculate the value of goodwill on the basis of 2 years purchase of average super profits earned :
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Incorrect
Question 15 of 30
15. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
Profits of last 3 years were Rs.6,000, Rs.13,000 and Rs.8,000. Calculate goodwill for 2 years of purchase.
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Incorrect
Question 16 of 30
16. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
An asset which is not fictitious but intangible in nature, having realizable value _______.
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Question 17 of 30
17. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
When there is no Goodwill Account in the books and goodwill is raised, _______ account will be debited.
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Question 18 of 30
18. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
Ravi and Suraj are partners having the profit sharing ratio 3 : 2 in a firm. They admitted Tarun in partnership and new profit sharing ratio of Ravi, Suraj and Tarun was decided at 2 : 2 : 1 respectively. Tarun brings in Rs.30,000 as goodwill. What would be the share of Ravi in goodwill ?
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Incorrect
Question 19 of 30
19. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
If old ratio between A & B is 1 : 1 & new ratio between A, B & C is 4 : 3 : 2 Recorded Goodwill of Rs.90,000 appears in B/S. Which accounts will be affected if they decide to write off goodwill immediately ?
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Question 20 of 30
20. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
What does not affect the goodwill of the firm ?
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Question 21 of 30
21. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
Which of the following statement is false ?
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Question 22 of 30
22. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
What would be the amount of actual average profit if goodwill is valued Rs.98,000 at 5 years purchase of super profit, normal rate of return is 10% and average capital employed is Rs.5,00,000 ?
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Question 23 of 30
23. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
Sacrificing ratio is used to distribute _____ on admission of a new partner :
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Question 24 of 30
24. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
On the admission of a new partner, it is decided that goodwill of the firm be valued at 2 years purchase of average profits for the past 3 years which amounted to Rs.8,620, Rs.9,430 and Rs.11,800 respectively. The value of goodwill is :
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Question 25 of 30
25. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
X and Y are partners sharing profits and losses in the ratio of 3 : 1. They admit Z as a partner who pays Rs.4,000 a goodwill. The new profit sharing ratio being 2 : 1 : 1. The goodwill will be credited to :
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Incorrect
Question 26 of 30
26. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
A and B together are sharing 2/3rd of the profits of the firm. C and D are sharing profits in the ratio of 3 : 2. Find the ratio of A : B : C 😀
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Question 27 of 30
27. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
A and B share profits and losses in the ratio 2 : 1.
C is admitted with 1/4th share in profits
C acquired 3/4th of his share in profits from A and 1/4th of his share from B. New profit and loss sharing ratio will be :
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Question 28 of 30
28. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
Rohan and Sohan are partner, in a firm sharing profit and losses in the ratio of 3 : 1, A new partner Mohan is admitted and he brings Rs.40,000 as goodwill. New profit sharing after admission is equal. The amount of goodwill to be shared by old partners as :-
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Question 29 of 30
29. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
The total capital of a partnership firm is Rs.6,00,000 and annual average profits of the firm are Rs.1,50,000. The normal rate of return in the business is considered at 20%. Find out the value of the goodwill at 3 years purchase of super profit.
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Incorrect
Question 30 of 30
30. Question
1 points
Category: FUNDAMENTAL OF ACCOUNTING
Capital employed by M/s PQR is Rs.5,00,000. Rate of normal profit is 20%. Past four year’s profits were as follows :
Year Profit (Rs.)
1 1,20,000
2 1,80,000
3 1,50,000
4 2,00,000
Calculate value of goodwill at 2 years purchase using super profit method :