WorksheetsValuation of Goodwill and Shares Quiz
Total questions: 25
Worksheet time: 13mins
Goodwill represents ______.
Tangible asset
Fictitious asset
Intangible asset
Current asset
Valuation of goodwill means ______.
Determining the cost of fixed assets
Determining the monetary value of goodwill
Determining net profit
Assessing liabilities
Goodwill arises due to ______.
Efficient management and good reputation
Heavy losses
Excess liabilities
Depreciation
Goodwill is shown in the Balance Sheet under ______.
Current Assets
Non-current Liabilities
Intangible Assets
Investments
Goodwill is valued only when ______.
Required by management
There is a legal necessity such as partnership change
Assets increase
Liability decreases
Which of the following is not a method of valuing goodwill?
Average Profit Method
Super Profit Method
Annuity Method
Intrinsic Value Method
Average Profit Method values goodwill based on ______.
Future profits
Past average profits multiplied by number of years’ purchase
Total assets
Super profits
Super profit means ______.
Excess of average profit over normal profit
Normal profit over average profit
Average profit over total capital
Total profit over capital
Under Super Profit Method, Goodwill = ______.
Super Profit × Number of years’ purchase
Average Profit × Number of years’ purchase
Capital employed ÷ Normal Rate
Average Profit – Normal Profit
Under Capitalisation of Average Profit Method, Goodwill = ______.
Capitalised Value of Average Profit – Actual Capital Employed
Average Profit × No. of years
Super Profit × No. of years
Average Profit ÷ Normal Rate of Return
Under Capitalisation of Super Profit Method, Goodwill = ______.
Super Profit ÷ Normal Rate of Return
Super Profit × Years’ Purchase
Average Profit × Years’ Purchase
None of these
The formula for goodwill under Annuity Method is ______.
Super Profit × Present value of ₹1 annuity
Average Profit × No. of years
Capitalised Value – Capital Employed
None of these
Goodwill cannot be created by ______.
Purchase
Internal generation
Amalgamation
Partnership admission
Share valuation means determining ______.
The book value of goodwill
The real worth of a share
The market price of debentures
The amount of dividend
Valuation of shares becomes necessary when ______.
Shares are listed on the stock exchange
Company is being sold or amalgamated
Company is making profits
For payment of dividend
Which of the following is not a reason for valuation of shares?
Amalgamation or merger
Tax purposes
Purchase of new machinery
Conversion of shares into preference shares
Which of the following is a method of valuation of shares?
Average Profit Method
Net Assets Method
Super Profit Method
Annuity Method
Net Assets Method is also known as ______.
Intrinsic Value Method
Yield Method
Fair Value Method
Dividend Method
Under Net Assets Method, the value per share = ______.
Net Assets ÷ Number of Equity Shares
Net Profit ÷ Number of Shares
Dividend ÷ Market Price
Total Assets ÷ Liabilities
Yield Method is based on ______.
Net worth of the company
Profits available for dividend
Total capital employed
Market value of assets
Fair Value Method combines ______.
Average Profit and Super Profit Method
Net Assets and Yield Method
Yield and Capitalisation Method
Intrinsic and Dividend Method
Fair Value of Share = (Intrinsic Value + Yield Value) ÷ ______.
2
3
4
5
In the Net Assets Method, liabilities include ______.
Equity Capital
Reserves and Surplus
All external liabilities
Goodwill
When a company has fluctuating profits, the best method of share valuation is ______.
Net Assets Method
Yield Method
Fair Value Method
Capitalisation Method
Valuation of shares is generally done by ______.
Government officers
Company auditors or valuers
Employees
Customers
