Match List I with List II. List I List II A. Average Profit I. Total…

Match List I with List II.

List I	List II
A. Average Profit	I. Total weighted profits / Total weights
B. Super Profit	II. Total Asset- outside liability
C. Firm's Capital	III. Total Profit / No. of year
D. Weighted Average	IV. Average Profit- Normal Profit

Choose the correct answer from the options given below :

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → A-III, B-IV, C-II, D-I

(A) Average Profit — this matches (III) Total Profit / No. of year. Simple average of the past profits.

(B) Super Profit — this matches (IV) Average Profit- Normal Profit. The profit earned above the normal return.

(C) Firm's Capital — this matches (II) Total Asset- outside liability. Net assets employed in the business.

(D) Weighted Average — this matches (I) Total weighted profits / Total weights. Each year’s profit is multiplied by its weight.

NCERT (2026-27 edition):
Average Profits Method

Extract from the NCERT textbook

NCERT (2026-27 edition):
Super Profits Method – “… The goodwill under the super profit method is ascertained by multiplying the super profits by certain number of years’ purchase. If, in the above example, it is expected that the benefit of super profits is likely to be available for 5 years in future, the goodwill will be valued at Rs. 15,000 (3,000 × 5). Thus, the steps involved under the method are: 1. Calculate the average profit, 2. Calculate the normal profit on the firm’s capital on the basis of the normal rate of return, 3. Calculate the super profits by deducting normal profit from the average profits, and 4. Calculate goodwill by multiplying the super profits by the given number of years’ purchase.”

NCERT (2026-27 edition):
Capitalisation of Average Profits – “… (iii) Ascertain the actual firm’s capital (net assets) by deducting outside liabilities from the total assets (excluding goodwill and ficticious assets). Firms’ Capital = Total Assets (excluding goodwill) – Outside Liabilities Where outside Liabilities include both long term and short term Liabilities.”

NCERT (2026-27 edition):
Average Profits Method

Extract from the NCERT textbook

Match List I with List II.

List I	List II
A. Average Profit	I. Total weighted profits / Total weights
B. Super Profit	II. Total Asset- outside liability
C. Firm's Capital	III. Total Profit / No. of year
D. Weighted Average	IV. Average Profit- Normal Profit

Choose the correct answer from the options given below :

Answer & explanation

Correct answer: option 3

The correct answer is Option (3) → A-III, B-IV, C-II, D-I

(A) Average Profit — this matches (III) Total Profit / No. of year. Simple average of the past profits.

(B) Super Profit — this matches (IV) Average Profit- Normal Profit. The profit earned above the normal return.

(C) Firm's Capital — this matches (II) Total Asset- outside liability. Net assets employed in the business.

(D) Weighted Average — this matches (I) Total weighted profits / Total weights. Each year’s profit is multiplied by its weight.

NCERT (2026-27 edition):
Average Profits Method

Extract from the NCERT textbook

NCERT (2026-27 edition):
Average Profits Method

Extract from the NCERT textbook