# MCQ Questions on Goodwill

MCQ Questions on Goodwill: Below, You will find a list of Commerce MCQ Questions as per the latest prescribed syllabus. Ace up your preparation with the Objective Questions available on Goodwill and enhance your subject knowledge. Understand the concept clearly by consistently practicing the Multiple Choice Questions and score well in your exams.

## MCQ Questions on Goodwill

1. Goodwill is defined as
(a) Intangible asset
(b) Fictitious asset
(c) Current asset
(d) Liquid asset

2. 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

3. 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

4. A firm’s goodwill is not affected by
(a) Location of the firm
(b) The reputation of the Firm
(c) Better Customer Service
(d) None of the Above

5. 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

6. 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

7. 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. The value of goodwill of the company as per the capitalization method will be
(a) ₹ 82,00,000
(b) ₹ 12,00,000
(c) ₹ 72,00,000
(d) ₹ 42,00,000

8. A firm earns ₹1,00,000. The normal rate of return is 10%. The assets of the company amounted to ₹11,00,000 and liabilities to ₹1,00,000. Value of goodwill by the capitalization of average actual profit will be
(a) ₹ 2,00,000
(b) ₹ 10,000
(c) ₹ 5,000
(d) ₹ 1,00,000

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