Quiz  /  Average Profit Method Class 12 MCQ Questions With Answers

  • 1. 
    ……..should compensate …………..in the case of reconstitution of the firm.

  • Gaining partner, sacrificing partner
  • gaining partner sacrificing partner
  • gainer sacrificer
  • business, partners

  • 2. 
    Self Generated Goodwill can also be termed as ............. Goodwill

  • Non Purchased goodwill
  • Non Purchased goodwill
  • Yas Purchased goodwill
  • All of above

  • 3. 
    Capital invested in a firm is 5,00,000. Normal rate of return is 10%. Average profit of the firm are 64,000 (after an abnormal loss of 4,000). Value of goodwill at four times the super profits will be:

  • 72000
  • 70000

  • 4. 
    Accounting standard................only Purchased goodwill should be recorded.

  • 26
  • 26
  • 26.5%

  • 5. 
    Super profit is equal to Average Profit less..................

  • Normal Profits
  • T otal profits/N o.of years
  • Capital employed *normal rate of return
  • Super profit *no.of years of purchase

  • 6. 
    The excess amount which the firm can get on selling its assets over and above the saleable value of its assets is called :

  • Goodwill
  • Super profits
  • Surplus
  • Reserve
  • Goodwill

  • 7. 
    Following are the methods of calculating goodwill except:

  • Super profit method
  • Average profit method
  • Weighted Average profit method
  • Capital profit method

  • 8. 
    When the value of goodwill of the firm is not given but has to be inferred on the basis of the net worth of the firm ,it is called……………..

  • Hidden Goodwill
  • Value of Goodwill
  • Both A & B
  • None of these

  • 9. 
    Reserves and accumulated profits are transferred to partners ' capital accounts at the time of reconstitution in:

  • old profit sharing ratio
  • Gaining ratio
  • Sacrificing Ratio
  • New profit-sharing ratio

  • 10. 
    When profits shows a growth trend we should use ............ Average Profits to calculate goodwill.

  • Weighted Average profit
  • Average profit
  • Both A & B
  • None of these

  • 11. 
    Goodwill is not valued during ………….

  • Dissolution of Firm
  • Death of a partner
  • The retirement of a partner
  • None of these

  • 12. 
    Increase and decrease in the value of assets and liabilities are recorded through:

  • Partners' Capital Account
  • Revaluation Account
  • Profit and Loss Appropriation Ne
  • Balance Sheet

  • 13. 
    A and B are partners in a firm sharing profits in the ratio of 3 : 2. They decided to share future profits equally. Calculate A’s gain or sacrifice

  • 1/10 sacrifice
  • 1/10 (S)
  • 1/10
  • 1/10 sacrifice

  • 14. 
    Any change in the relationship of existing partners which results in an end of the existing agreement and enforces making of new·agreement is called:

  • Reconstitution of Partnership Firm
  • Revaluation of partnership Firm
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