
Practice Quiz
17 questions

1. Define Goodwill.
1 m

2. What is the base for the valuation of goodwill ?
1 m

3. Will the value of goodwill be more or less for a monopolistic type of business?
1 m

4. When is the valuation of goodwill necessary ?
1 m

5. While valuing goodwill by capitalization of average profit, which points are to be considered?
1 m

6. Which kind of business has goodwill value ?
1 m

7. What is super profit?
1 m

8. State the method for valuation of goodwill when profit of the last years has increasing trend?
1 m

9. State the methods for the valuation of goodwill.
1 m

10. State the factors affecting valuation of goodwill.
1 m

11. State the circumstances under which weighted average profit method of valuation of goodwill is used.
1 m

12. In balance sheet, goodwill is shown on which side and under which heading ?
1 m

13. In which type of business goodwill does not exist?
1 m

14. State the ‘other special benefits’ regarding factors affecting valuation of goodwill.
1 m

15. State the circumstances in which valuation of goodwill arises in case of partnership firm.
1 m

16. What is Capitalized profit ?
1 m

17. State the formula for Capitalized profit.
1 m

18. According to capitalized profit method, when can we day that ‘Business does not have goodwill’ ?
1 m

19. What is the nature of goodwill for business, which depends on the individual’s skills ?
1 m

20. What is expected rate of return ?
1 m

21. What is the nature of goodwill for a highly competitive business, and why?
1 m

22. State the demerits of simple average method of valuing the goodwill.
1 m

23. What is meant by average profit value based on expected rate of return ?
1 m

Chapter 3 Practice Material
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One Line Answer and Theory
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