The term ‘Number of Years’ Purchase means:
The term ‘Number of Years’ Purchase means:
a) The number of years during which the purchaser or Goodwill expects that the profit due to goodwill is likely to arise in the future.
b) Number of years for which goodwill is purchased.
c) Number of years for which goodwill purchased will not help the firm in earning similar profits.
d) None of the above.
Anurag Pathak Changed status to publish April 16, 2023
Ans – a)
Explanation:-
The ‘number of years purchase’ in the calculation of goodwill are the expected years that the profit due to goodwill is likely to arise in the future.
For example, there is 2 years purchase. It means the profit due to goodwill is likely to arise in the future for the next 2 years.
Anurag Pathak Changed status to publish April 16, 2023
