Partnership

Admission

Easy

common

The term Number of Years' Purchase means:

Number of years for which goodwill is purchased.

Number of years during which the purchaser of goodwill expects that the profit due to goodwill are likely to arise in future.

Number of years for which goodwill purchased will not help the firm in earning similar profits.

Number of years for which the company is running business.

✅ Correct Option: 2

Number of years' purchase is the multiplier applied to average or super profit. It represents the number of years for which the buyer expects the benefit of the acquired goodwill, that is, the extra profits attributable to goodwill, to continue in the future. It is not the age of the business or the life of the purchase agreement.

2025: 16 May Shift 1

Goodwill is considered as

2025: 30 May Shift 2

The important methods of valuation of goodwill are as follows:

(A) Average Profits Method

(B) Normal Profits Method

(D) Capitalization Method

Choose the correct answer from the options given below:

2022: 20 Aug Shift 2

The amount of distributed profits of both the partner's will be:

2025: 27 May Shift 1

When a new partner brings his share of goodwill in cash, the amount is credited to-

2025: 13 May Shift 2

Which account is credited if the value of net assets exceeds purchase consideration at the time of purchase of business?

2026: 24 May Shift 1

Sunila and Manisha are partners in a firm sharing profits and losses in the ratio of 5:3. Radhika is admitted in the firm for 1/5th share of profits. She brings in Rs. 40,000 as her share of goodwill. Give the necessary journal entries, when partners decided to retain goodwill in the business.

The term Number of Years' Purchase means:

Solution

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CUET Accountancy Past Year Questions (Topic-Wise)