Which of the following statements is true?

(a)

Goodwill is an intangible asset

(b)

Goodwill is a current asset

(c)

Goodwill is a fictitious asset

(d)

Goodwill cannot be acquired

Super profit is the difference between

(a)

Capital employed and average profit

(b)

Assets and liabilities

(c)

Average profit and normal profit

(d)

Current year’s profit and average profit

The average rate of return of similar concerns is considered as

(a)

Average profit

(b)

Normal rate of return

(c)

Expected rate of return

(d)

None of these

Which of the following is true?

(a)

Super profit = Total profit / number of years

(b)

Super profit = Weighted profit / number of years

(c)

Super profit = Average profit – Normal profit

(d)

Super profit = Average profit x Years of purchase

Identify the incorrect pair

(a)

Goodwill under Average profit method - Average profit × Number of years of purchase

(b)

Goodwill under Super profit method - Super profit × Number of years of purchase

(c)

Goodwill under Annuity method - Average profit × Present value annuity factor

(d)

Goodwill under Weighted average profit method - Weighted average profit × Number of years of purchase

When the average profit is Rs. 25,000 and the normal profit is Rs. 15,000, super profit is __________

(a)

Rs. 25,000

(b)

Rs. 5,000

(c)

Rs. 10,000

(d)

Rs. 15,000

Book profit of 2017 is Rs. 35,000; non-recurring income included in the profit is Rs. 1,000 and abnormal loss charged in the year 2017 was Rs. 2,000, then the adjusted profit is __________

(a)

Rs. 36,000

(b)

Rs. 35,000

(c)

Rs. 38,000

(d)

Rs. 34,000

The total capitalised value of a business is Rs. 1,00,000; assets are Rs. 1,50,000 and liabilities are Rs. 80,000. The value of goodwill as per the capitalisation method will be

(a)

Rs. 40,000

(b)

Rs. 70,000

(c)

Rs. 1,00,000

(d)

Rs. 30,000