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Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Admission of a Partner

Question:

Match the following list 1 with list 2.

LIST 1 LIST 2
A) Favourable location I) Excess of actual profit over normal profit
B) High risk II) Sale of machinery
C) Super profit III) More goodwill
D) Capital profit IV) Less goodwill

 Choose the correct answer from the options given below.

Options:

A-III, B-IV, C-I, D-II

A-I, B-II, C-IV, D-III

A-III, B-I, C-IV, D-II

A-III, B-IV, C-II, D-I

Correct Answer:

A-III, B-IV, C-I, D-II

Explanation:

The correct answer is option 1- A-III, B-IV, C-I, D-II.

LIST 1 LIST 2
A) Favourable location III) More goodwill
B) High risk IV) Less goodwill
C) Super profit I) Excess of actual profit over normal profit
D) Capital profit II) Sale of machinery


*Favourable location- If any business is located at a favourable place where customer can easily come and purchase goods which make the sales to increase and ultimately the value of goodwill will be higher.

*High risk- If the risk faced by the business are higher than normal, then the business will have less goodwill whereas if the business faces less risk then it will have higher goodwill.

* Super profit  is earned by a firm when there actual profit is more than the normal profit i.e.profit earned by similar business.

* Capital profit- Sale of machinery is a capital profit for the business.

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