Question : Average of the profit of past agreed years is known as __________.

Option 1: super profit 

Option 2: normal profit 

Option 3: average profit 

Option 4: capital employed 

Question :  Under the super profit method, goodwill is calculated by

Option 1: Number of years purchase X Average profit

Option 2: Number of years purchase X Super profit

Option 3: super profit/normal rate of return

Option 4: super profit - normal profit 

Question : When a similar type of business earns profit at a standard percentage of the Capital employed, it is called __________ .

Option 1: Normal return 

Option 2: Interest on loan 

Option 3: Interest on drawing 

Option 4: Super profit 

Question : Under average profit methods goodwill is calculated as

Option 1: Super profit x No. of years purchases

Option 2: Average profit X No. of years purchases

Option 3: Capital employed X  No. of years purchases

Option 4: Super profit/expected rate of return

Question : The average capital employed in a business is Rs.5,00,000 and the average net profit earned is Rs.65,000. If normal rate of return on capital employed is 8% and remuneration of Rs.20,000 is expected, then the super profit of the concern is:

Option 1: Rs.15,000

Option 2: Rs.5,000

Option 3: Rs.25,000

Option 4: Rs.5,200