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CUET Accountancy 2025 PYQs31 May Shift 1. Free, no login required.

Partnership

past year questions, CUET Accountancy 2025 31 May Shift 1

Admission

past year questions, Partnership, CUET Accountancy 2025 31 May Shift 1

Easy

common

Select the factors affecting the value of goodwill-

(A) Nature of business.

(B) Efficiency of management.

(C) Location.

(D) Prices.

Choose the correct answer from the options given below:

Solution

✅ Correct Option: 2

Goodwill represents the value of a firm's reputation, customer loyalty, and other intangible advantages. Several factors influence its valuation.

Let's examine each factor:

(A) Nature of business - This directly affects goodwill. A business dealing in essential goods or having unique products will have higher goodwill compared to one dealing in common commodities. Manufacturing, trading, and service businesses have different goodwill characteristics.

(B) Efficiency of management - This is a crucial factor. Efficient management leads to better customer relations, cost control, and consistent profits, which significantly enhance goodwill value.

(C) Location - This strongly impacts goodwill. A business situated in a prime commercial area with high footfall and easy accessibility commands higher goodwill than one in a remote location.

(D) Prices - This is not typically considered a direct factor affecting goodwill. While product prices may indirectly influence profits, "prices" as such is not recognized as a standard factor in goodwill valuation.

The recognized factors affecting goodwill include nature of business, location, management efficiency, reputation, capital required, risk involved, and profit trends. Price levels are not independently classified as a goodwill factor.

Therefore, factors (A), (B), and (C) only affect the value of goodwill.

Correct Answer: Option 2

Related questions:

2026: 6 June Shift 1

Amit and Beena are partners in a firm sharing profits in the ratio of 3:2. They admit Chitra as a new partner. Amit sacrificed 1/4 of his share and Beena 1/3 of her share in favour of Chitra. The new profit sharing ratio of Amit, Beena and Chitra will be:

2026: 21 May Shift 1

Match List-I with List-II

List-IList-II
(A) In this method, the person who purchases a running business must pay in the form of goodwill, a sum which is equal to the profits he is likely to receive for the first few years.(I) Capitalised value of business
(B) It is desirable to value goodwill on the basis of the excess profits and not the actual profits.(II) Goodwill
(C) Average Profits × 100/Normal Rate of Return(III) Super Profit Method
(D) Capitalised value – Net Assets(IV) Average profit Method

Choose the correct answer from the options given below:

2023: 20 June Shift 2

A newly admitted partner has the right to -

2025: 24 May Shift 1

Match List-I with List-II

List-IList-II
Revaluation of assets and reassessment of liabilities at the time of admission of a new partnerJournal Entry
(A) For increase in the value of an asset(I) Revaluation A/c Dr. To Asset A/c
(B) For reduction in the amount of a liability(II) Revaluation A/c Dr. To Liability A/c
(C) For reduction in the value of an asset(III) Asset A/c Dr. To Revaluation A/c
(D) For appreciation in the amount of a liability(IV) Liability A/c Dr. To Revaluation A/c

Choose the correct answer from the options given below:

2022: 16 July Shift 2

Sometimes the value of Goodwill is not given at the time of admission/retirement of a partner. In such a situation, it has to be inferred from capital and profit sharing ratio. such Goodwill is called

2025: 14 May Shift 1

The New Profit Sharing Ratio in this case is:

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