Question :  The term number of years' purchases means

Option 1: The number of years during which the purchaser of goodwill expect that the profit due to goodwill are likely to arise in future 

Option 2: Number of years in which good will is purchased 

Option 3: Number of years for which goodwill purchased will not help the firm in earing similar profits 

Option 4: None of the above

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 : Average profits of a firm during the last few years are Rs. 80,000 and the normal rate o return in a similar business is 10%. If the goodwill of the firm is Rs. 1,00,000 at 4 years purchase of super profit, the value of capital employed by the firm is 

Option 1: Rs 55,000

Option 2: Rs 5,50,000

Option 3: Rs 10,50,000

Option 4: Rs 1,00,000

Question : Increase in value of Goodwill means___________

Option 1: Goodwill purchased

Option 2: Non purchased goodwill ( self - Generated goodwill )

Option 3: Both 1 and 2

Option 4: None of the above

Question : Increase in value of Goodwill means___________

Option 1: Goodwill purchased

Option 2: Non purchased goodwill ( self - Generated goodwill )

Option 3: Both 1 and 2

Option 4: None of the above

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