Get Started
Start Free Mocks
CUETMOCK

Ace Your

CUET Preparation Today

Start Free Mocks
Home Questions W984D66289
Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Admission of a Partner

Question:

Match the following regarding the calculation of profits for the final calculation of goodwill.

LIST 1 LIST 2
A) Abnormal gain I) Added to profit of the particular year
B) Closing stock of the last year II) Surplus invested outside
C) Non trade investments III) Opening stock of the current year
D) Abnormal loss IV) Deducted from the profit of the particular year

Choose the correct answer from the options given below.

Options:

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

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

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

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

Correct Answer:

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

Explanation:

The correct answer is option 4- A-IV, B-III, C-II, D-I.

LIST 1 LIST 2
A) Abnormal gain IV) Deducted from the profit of the particular year
B) Closing stock of the last year III) Opening stock of the current year
C) Non trade investments II) Surplus invested outside
D) Abnormal loss I) Added to profit of the particular year

 

*Abnormal gain- The abnormal profit of the year is subtracted from the net profit of that year.

*Closing stock of the last year- Closing stock of the previous year becomes the opening stock of the next year.

*Non trade investments- Income not earned from the business operations, such as income from investments is deducted from the net profit of that year.  This investment is done to invest surplus funds of the firm to earn extra revenue.

*Abnormal loss- The abnormal loss of the year is added to the net profit of that year.

CUET Questions