Goodwill can also be ascertained by capi

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Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Admission of a Partner

Question:

Goodwill can also be ascertained by capitalising the super profit directly under which method?

Options:

Super Profit Method

Average Profit Method

Weighted Average Profit method

Capitalisation of Super Profit Method

Correct Answer:

Capitalisation of Super Profit Method

Explanation:

The correct answer is option 4- Capitalisation of Super Profit Method.

Goodwill can also be ascertained by capitalising the super profit directly under the Capitalisation of Super Profit Method.

Goodwill as per capitalisation of super profit = Super profit x 100/ Normal rate of return.