23 Views

Question : Identify the correct order for calculating goodwill under Capitalisation of Average Profit Method:
(i) Calculate capitalised value of the firm
(ii) Ascertain the value of net assets, on the date of valuation of goodwill
(iii) Calculate average profit earned
(iv) Find the difference between capitalised value of the firm and net assets

Option 1: (i), (ii), (iii), (iv)

Option 2: (ii), (iii), (iv), (i)

Option 3: (iii), (i), (ii), (iv)

Option 4: (iv), (iii), (ii), (i)


Team Careers360 4th Jan, 2024
Answer (1)
Team Careers360 16th Jan, 2024

Correct Answer: (iii), (i), (ii), (iv)


Solution : For calculating goodwill under Capitalisation of Average Profit Method:
(iii) Calculate average profit earned
(i) Calculate capitalised value of the firm
(ii) Ascertain the value of net assets, on the date of valuation of goodwill
(iv) Find the difference between capitalised value of the firm and net assets.
Hence, the correct option is 3.

Related Questions

Amity University | M.Tech Adm...
Apply
Ranked amongst top 3% universities globally (QS Rankings).
Amity University Noida MBA Ad...
Apply
Amongst top 3% universities globally (QS Rankings)
Graphic Era (Deemed to be Uni...
Apply
NAAC A+ Grade | Among top 100 universities of India (NIRF 2024) | 40 crore+ scholarships distributed
Amity University Noida B.Tech...
Apply
Among Top 30 National Universities for Engineering (NIRF 2024) | 30+ Specializations | AI Powered Learning & State-of-the-Art Facilities
UPES MBA Admissions 2025
Apply
Ranked #41 amongst institutions in Management by NIRF | 100% Placement | Last Date to Apply: 15th July
Amity University, Noida BBA A...
Apply
Ranked amongst top 3% universities globally (QS Rankings)
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books