A firm's average profit is ₹1,20,000, normal rate 10%, capital employed ₹8,00,000. Goodwill by capitalisation of average profit method will be: (Capitalised value of average profit less net assets) MCQ with Answer and Explanation

Question
A firm's average profit is ₹1,20,000, normal rate 10%, capital employed ₹8,00,000. Goodwill by capitalisation of average profit method will be: (Capitalised value of average profit less net assets)
A. ₹8,00,000
B. ₹4,00,000
C. ₹12,00,000
D. ₹2,00,000
Answer: Option B
Solution (By JKSSB Mock Tests)
Capitalised value = 1,20,000 / 10% = 12,00,000. Goodwill = 12,00,000 - 8,00,000 = 4,00,000.
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In Cost-Volume-Profit (CVP) analysis, 'Angle of Incidence' represents:
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B. The angle between total sales line and total cost line above the BEP
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Correct Answer: Option B

Explanation:
A wider angle of incidence on a break-even chart indicates a higher rate of profit generation once the break-even point is crossed.
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Question #2
The 'Segment Information' under Ind AS 108 is based on:
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Correct Answer: Option B

Explanation:
Ind AS 108 adopts a 'management approach' to identify operating segments.
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Input Tax Credit under GST is available for:
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Correct Answer: Option A

Explanation:
Input tax credit can be availed only on inputs used for business purposes, subject to conditions under GST law.
This question belongs to: Accountancy and Statistics Accountancy and Book Keeping
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