Match List – I with List – II. List - I List - II (A) Excess of actua… | Accountancy Part A CUET question

Match List – I with List – II.

List - I	List - II
(A) Excess of actual profits over the normal profits	(I) Revaluation Account
(B) Unrecorded assets of the firm brought into books	(II) Compulsory dissolution of a partnership firm
(C)Business of the firm becomes illegal	(III) Super Profit
(D) Death of a partner	(IV) Dissolution of Partnership

Choose the correct answer from the options given below.

Answer & explanation

Correct answer: option 4

The correct answer is Option (4) → (A)-(III), (B)-(I), (C)-(II), (D)-(IV)

(A) Excess of actual profits over the normal profits — this matches (III) Super Profit. It is the base of the super profits method of valuing goodwill.

(B) Unrecorded assets of the firm brought into books — this matches (I) Revaluation Account. On reconstitution an unrecorded asset is a gain credited to this account.

(C) Business of the firm becomes illegal — this matches (II) Compulsory dissolution of a partnership firm. The firm must be dissolved whatever the partners wish.

(D) Death of a partner — this matches (IV) Dissolution of Partnership. The old partnership ends, but the firm may go on with the remaining partners.

NCERT (2026-27 edition):
Methods of Valuation of Goodwill – “… But it is contended that the buyer’s real benefit does not lie in total profits; it is limited to such amounts of profits which are in excess of the normal return on capital employed in similar business. Therefore, it is desirable to value, goodwill on the basis of the excess profits and not the actual profits. The excess of actual profits over the normal profits is termed as super profits.”

NCERT (2026-27 edition):
Revaluation of Assets and Reassessment of Liabilities – “… At times there may also be some unrecorded assets and liabilities of the firm. These also have to be brought into the books of the firm. For this purpose the firm has to prepare the Revaluation Account.”

NCERT (2026-27 edition):
Dissolution of a Firm – “… 2. Compulsory Dissolution: A firm is dissolved compulsorily in the following cases: (a) when all the partners or all but one partner, become insolvent, rendering them incompetent to sign a contract; (b) when the business of the firm becomes illegal; or (c) when some event has taken place which makes it unlawful for the partners to carry on the business of the firm in partnership, e.g., when a partner who is a citizen of a country becomes an alien enemy because of the declaration of war with his country and India.”

NCERT (2026-27 edition):
Summary – “… A partnership gets terminated in case of admission, retirement death, etc. of a partner. This does not necessarily involve dissolution of the firm.”