Under the average profit method of goodwill valuation, the value of goodwill is determined by
Under the average profit method of goodwill valuation, the value of goodwill is determined by
a) No. of year’s purchase multiplied with average profit.
b) No. of year’s purchase multiplied with super profit
c) Super profit divided with expected rate of return
d) Total profits divided with normal rate of return.
Anurag Pathak Changed status to publish April 18, 2023
Ans – a)
Explanation:-
Goodwill = Average profit × no. of year’s purchase
Anurag Pathak Changed status to publish April 18, 2023
