Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Admission of a Partner

Question:
Under super profit basis goodwill is calculated by which method?
Options:
No. of years’ purchased x Average Profit
No. of years’ purchased x Super profit
 Super profit x Expected rate of return
None of these
Correct Answer:
No. of years’ purchased x Super profit
Explanation:
Super Profit method:
Value of goodwill = no. of years purchased x Super profit