# Goodwill MCQ Questions & Answers

Goodwill MCQs : This section focuses on the "Goodwill". These Multiple Choice Questions (MCQs) should be practiced to improve the Goodwill skills required for various interviews (campus interview, walk-in interview, company interview), placement, entrance exam and other competitive examinations.

Question 1

Under the capitalisation method, the formula for calculating the goodwill is

A. Super profits multiplied by the rate of return
B. Average profits multiplied by the rate of return
C. Super profits divided by the rate of return
D. Average profits divided by the rate of return

Question 2

Goodwill is also known as an intangible asset linked with the acquisition of one business by another.

A. Yes
B. No

Question 3

The total capital employed in the company is ₹8,00,000 a reasonable rate of return is 15% and the profit of the year is 412,00,000

A. ₹ 82,00,000
B. ₹ 12,00,000
C. ₹ 72,00,000
D. ₹ 42,00,000

Question 4

Goodwill is defined as

A. Intangible asset
B. Fictitious asset
C. Current asset
D. Liquid asset

Question 5

X, Y, and Z are partners in a company sharing profits in the ratio 4:3: 2

A. Dr X by ₹ 20,000, Cr Z by ₹20,000
B. Cr X by ₹ 20,000, Dr Z by ₹20,000
C. Dr X by ₹ 40,000, Cr Z by ₹40,000
D. Cr X by ₹ 20,000, Dr Z by ₹20,000

Question 6

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

A. Surplus
B. Super Profit
C. Reserve
D. Goodwill

Question 7

Weighted average method of calculating goodwill is used when

A. Profits are not equal
B. Profits show a trend
C. Profits are Fluctuating
D. None of the Above

Question 8

Break-even indicates

A. Revenues are more than cost
B. Revenues and cost are equal
C. Costs are more than revenue
D. None of the Above

Question 9

When there is a change in the current partners association that results in ending the existing agreement and initiate a formation of a new agreement is known as

A. Revaluation of Partnership
B. Reconstitution of Partnership
C. Realization of Partnership
D. None of the Above