Match List-I with List-IIList-IList-II(A)Intangible Asset(I)Goodwill…

Match List-I with List-II

List-I		List-II
(A)	Intangible Asset	(I)	Goodwill Valuation Method
(B)	Nature of Business	(II)	Characteristic of Goodwill
(C)	Super Profit	(III)	Factor affecting value of Goodwill
(D)	Self-generated	(IV)	Type of Goodwill

Choose the correct answer from the options given below:

Answer & explanation

Correct answer: option 2

The correct answer is Option (2) → (A) - (II), (B) - (III), (C) - (I), (D) - (IV)

List-II names what kind of idea each item in List-I is in the study of goodwill: a feature, a factor, a method or a type.

(A) Intangible Asset — this matches (II) Characteristic of Goodwill. Goodwill has no physical form but has a money value, which is the nature of an intangible asset.

(B) Nature of Business — this matches (III) Factor affecting value of Goodwill. A business with steady demand and stable profits commands more goodwill than a risky one.

(C) Super Profit — this matches (I) Goodwill Valuation Method. Goodwill can be valued as a number of years’ purchase of super profit, or as its capitalised value.

(D) Self-generated — this matches (IV) Type of Goodwill. Goodwill is either purchased or self-generated, depending on how the firm came to have it.

NCERT (2026-27 edition):
Meaning of Goodwill – “… In accounting, the monetary value of such advantage is known as “goodwill”. It is as an intangible asset. In other words, goodwill is the value of the reputation of a firm in respect of the profits expected in future over and above the normal profits.”

NCERT (2026-27 edition):
Factors Affecting the Value of Goodwill – “The main factors affecting the value of goodwill are as follows: 1. Nature of business: A firm that produces high value added products or having a stable demand is able to earn more profits and therefore has more goodwill.”

NCERT (2026-27 edition):
Methods of Valuation of Goodwill – “… The important methods of valuation of goodwill are as follows: 1. Average Profits Method 2. Super Profits Method …”

NCERT (2026-27 edition):
Applicability of Accounting Standard 26: Intangible Assets – “… (b) Self - generated goodwill is not accounted for in the books and shown as an asset.”