Valuation of Goodwill - Average profit method

1.Goodwill is an/a ________ asset.

    

    

     

      

• a) Both Intangible asset and Tangible asset

• b) Intangible asset

• c) Tangible asset

• d) None of these

2. According to AS 26, which goodwill is recorded in the books :

        

•   a) Purchased goodwill  

• b) Self generated goodwill

• c) both (i) and (ii)      

• d) None of the above

3. 3.When the business is taken over by another business, the excess of purchase consideration

over its net value of asset is referred to as ____.

• a) Generated Goodwill

• b) Super Goodwill

• c) Average Goodwill

• d) Purchased Goodwill

4. When a product plays an important role in increasing the goodwill of the firm, what factor is mainly responsible for that?

        

• a) Efficiency of Management

•   b) Quality of product.

• c) Favourable Contracts  

• d) Market Situation

5.Match the following

1. 1.Average profit (a) Internally generated goodwill

2. 2.Purchased goodwill (b) Acquired by making payment

3. 3. Generated goodwill (c) Normal business profit

• a) 1.(a) , 2. (b), 3. (c)             

• b) 1.(c) , 2. (b), 3. (a)

• c) 1.(b) , 2. (c), 3. (a)             

• d) 1.(b) , 2. (b), 3. (a)