Question : Assertion (A): A new business is likely to have lesser goodwill.
Reason (R): Goodwill is an intangible asset.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is false

Option 4: Assertion (A) is false but Reason (R) is true

Question : Assertion (A): Goodwill requires adjustment at the time of reconstitution of a firm.
Reason (R): The nature and location of business do not affect the valuation of goodwill.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is false

Option 4: Assertion (A) is false but Reason (R) is true

Question : Assertion (A): Purchased goodwill means goodwill for which a consideration has been paid.
Reason (R): It is shown in Balance Sheet as a liability.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion

Option 3: Assertion (A) is true but Reason (R) is false

Option 4: Assertion (A) is false but Reason (R) is true

Question : Assertion (A): Goodwill is as an intangible asset.
Reason (R): The goodwill is calculated by multiplying the past average profits by the number of years during which the anticipated profits are expected to accrue.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A)

Option 3: Assertion (A) is true but Reason (R) is false

Option 4: Assertion (A) is false but Reason (R) is true

Question : Assertion (A): Abnormal loss of a year should be subtracted from the net profit of the year for the calculation of goodwill.
Reason (R): Future profits depend upon the average performance of the business in the past.

Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)

Option 2: Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion

Option 3: Assertion (A) is true but Reason (R) is false

Option 4: Assertion (A) is false but Reason (R) is true