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easyMCQCUET Accountancy 2025 27 May Shift 22026Accountancy
1 mark

Under which method is the goodwill valued at an agreed number of years' purchase of the average profits of the past few years?

  1. A
    Average Profits Method
  2. B
    Super Profits Method
  3. C
    Capitalisation Method
  4. D
    Value-addition Method

Solution & Step-by-step Explanation

Under the Average Profits Method, goodwill is calculated by multiplying the adjusted average profits of a past set of continuous years by a specific chosen number of years' purchase.

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Under which method is the goodwill valued at an agreed number of years' purchase of the average profits of the past few years?
A
Average Profits Method
B
Super Profits Method
C
Capitalisation Method
D
Value-addition Method

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