Under which method is the goodwill value

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Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Accounting for Partnership

Question:

Under which method is the goodwill valued at agreed number of 'years' purchase of the average profits of the past few years?

Options:

Average Profits Method

Super Profits Method

Capitalisation Method

Value-addition Method

Correct Answer:

Average Profits Method

Explanation:

The correct answer is Option (1) → Average Profits Method