Goodwill
5 Board Accountancy previous year questions on Goodwill — options free on every question; 1 include the answer & explanation free, the rest unlock with PYQ Pass.
If Average Capital Employed in a firm is ₹9,00,000, Average Profits ₹2,80,000, and Normal rate of return is 20%, then the value of goodwill as per capitalisation of super profits is :
₹ 5,00,000
Option B
Normal Profit = Capital Employed x Normal Rate of Return
\(=9,00,000\times \frac{20}{100}\\ =₹1,80,000\)
Super Profit = Average Profit - Normal Profit
\(=2,80,000-1,80,000\\ =₹1,00,000\)
Goodwill = \(\frac{\mathrm{Super}\mathrm{Profit}}{\mathrm{Normal}\mathrm{Rate}\mathrm{of}\mathrm{Return}}\)
\(=\frac{1,00,000}{20}\times 100\\ =₹5,00,000\)
Match items given in List I with those in List II
| List I (Types of Goodwill) | List II (Treatment to be done) |
| 1) Existing Goodwill | a) No Entry Passed |
| 2) Goodwill Premium | b) Inferred from the capital arrangement. |
| 3) Goodwill paid privately. | c) Written off |
| 4) Hidden goodwill | d) Credited to the sacrificing partner. |
Options are free to see. Unlock the correct answer and full explanation with Pass.
As per AS-26, assets like goodwill should be written off:
Options are free to see. Unlock the correct answer and full explanation with Pass.
Which accounting standard is applicable for recognizing Intangible assets?
Options are free to see. Unlock the correct answer and full explanation with Pass.
Net Capital Employed is equal to :
(A) Fixed Assets + Current Assets - Long term liabilities
(B) Non current Assets + Current Assets - Current liabilities
(C) Fixed Assets + Current Assets - Equity
(D) Equity + Debt
(E) Current Assets-Current liabilities
Choose the correct answer from the options given below :
Options are free to see. Unlock the correct answer and full explanation with Pass.
Practice more Board Accountancy PYQs
Browse every Accountancy chapter, or explore the full Board question bank.
📒 All Accountancy chapters →