Which is the present value of a firm's future excess earnings?

(a)

Fixed asset

(b)

Current assets

(c)

Good will

(d)

None of these

Goodwill is shown under fixed assets in the ___________

(a)

Trial balance

(b)

Balance sheet

(c)

Trading account

(d)

Profit and loss account

The monetary value of such advantage is termed as ____________

(a)

Goodwill

(b)

Bank overdraft

(c)

Capital

(d)

Cash

Goodwill helps in earning more profit and attracts more _________

(a)

customers

(b)

producers

(c)

competitors

(d)

suppliers

The profit earning capacity of the firm determines the value of its _____________

(a)

balance sheet

(b)

goodwill

(c)

profit and loss account

(d)

all of these

Goodwill acquired by making payment in cash or kind is called __________

(a)

Purchased goodwill

(b)

Self-generated goodwill

(c)

Average goodwill

(d)

'a' and 'b'

Which of the following method, goodwill is calculated by multiplying the weighted average profit?

(a)

Super profit method

(b)

Annuity

(c)

Weighted average profit method

(d)

All of these

Self- generated goodwill should not be shown in the ______________

(a)

journal

(b)

ledger

(c)

balance sheet

(d)

books of accounts

The total capitalised value of the business is calculated by capitalising the average profits on the basis of __________

(a)

average profit

(b)

normal rate of return

(c)

actual capital employed

(d)

none of these

Goodwill is to be valued when ____________

(a)

amalgamation takes place

(b)

a partner is admitted

(c)

one company takes over another company

(d)

all of the above

Goodwill is paid for obtaining ____________

(a)

future profit

(b)

present benefit

(c)

past benefit

(d)

none of the above

Super profit is ___________

(a)

excess of average profit over normal profit

(b)

extra profit earned

(c)

average profit earned by similar companies

(d)

none of the above

Normal profit is ___________

(a)

average profit earned

(b)

profit earned by similar companies in the same industry

(c)

both 'a' and 'b'

(d)

none of the above

Goodwill as per purchase of average profit method is equal to ____________

(a)

Average profit

(b)

Average profit x Amount of purchases

(c)

Average profit x Number of years purchases

(d)

All of the above

The company earns a net profit of Rs. 24,000 with a capital of Rs. 1,20,000. The NRR is 10% under capitalisation of super profit goodwill will be ___________

(a)

Rs. 70,000

(b)

Rs. 24,000

(c)

Rs. 12,000

(d)

Rs. 1,20,000