CLASS XII Accounts Valuation of goodwill

A Partnership is reconstituted due to

• Change in profit sharing ratio among exiting partner

• Admission of Partner

• Retirement /death of partner

• All above

Sacrificing ratio of a partner is computed as

• Old ratio - New ratio

• Old ratio - Gaining ratio

• New ratio - Old ratio

• None of these

Gaining ratio of a partner is computed as

• Old ratio - New ratio

• New ratio - Old ratio

• New ratio - Sacrificing ratio

• None of these

Goodwill is an ________ assets

• Wasting

• Intangible

• Fictitious

• None of these

Goodwill may be defined as excess amount paid for a business over and above its

• Tangible assets

• Current assets

• Total assets

• Net worth

Goodwill is an intangible assets but not a ________ assets

• Fixed

• Current

• Fictitious

• None of these

Goodwill of a firm is affected by its

• Location

• Nature of business

• Degree of competition

• All above

Goodwill of a firm is not valued during

• Admission of a partner

• Retirement of a partner

• Death of a partner

• Dissolution of partnership firm

The average capital employed in a business is Rs. 5,00,000 and average net profit Rs 65,000. Normal rate of return is 10%, its super profit will be

• 5000

• 6500

• 15000

• 20000

Which step is not involved in valuing the goodwill according to super profit method

• Ascertain Average Profit

• Ascertain Super Profit

• Ascertain Normal Profit

• Multiply Super Profit with Number of years purchased