Class 12 Accountancy one word question and answer

 CHAPTER IV

Choose the correct answer

1. Which of the following statements is true?

(a) Goodwill is an intangible asset

(b) Goodwill is a current asset

(c) Goodwill is a fictitious asset

(d) Goodwill cannot be acquired

2. Super profit is the difference between

(a) Capital employed and average profit

(b) Assets and liabilities

(c) Average profit and normal profit

(d) Current year’s profit and average profit

3. The average rate of return of similar concerns is considered as

(a) Average profit

(b) Normal rate of return

(c) Expected rate of return

(d) None of these

4. Which of the following is true?

(a) Super profit = Total profit / number of years

(b) Super profit = Weighted profit / number of years

(c) Super profit = Average profit – Normal profit

(d) Super profit = Average profit × Years of purchase

5. Identify the incorrect pair

(a) Goodwill under Average profit method - Average profit × Number of years of purchase

(b) Goodwill under Super profit method - Super profit × Number of years of purchase

(c) Goodwill under Annuity method - Average profit × Present value annuity factor

(d) Goodwill under Weighted average - Weighted average profit × Number of years of

profit method purchase

6. When the average profit is ₹ 25,000 and the normal profit is ₹ 15,000, super profit is

(a) ₹ 25,000

(b) ₹ 5,000

(c) ₹ 10,000

(d) ₹ 15,000

7. Book profit of 2017 is ₹ 35,000; non-recurring income included in the profit is ₹ 1,000 and

abnormal loss charged in the year 2017 was ₹ 2,000, then the adjusted profit is

(a) ₹ 36,000

(b) ₹ 35,000

(c) ₹ 38,000

(d) ₹ 34,000

8. The total capitalised value of a business is ₹ 1,00,000; assets are ₹ 1,50,000 and liabilities are ₹

80,000. The value of goodwill as per the capitalisation method will be

(a) ₹ 40,000

(b) ₹ 70,000

(c) ₹ 1,00,000

(d) ₹ 30,000

Answers

1 (a) 2(c) 3(b) 4(c) 5 (c) 6(c) 7(a) 8(d)