3. The excess amount which the firm can get on selling its assets over and above the saleable
value of its assets is called
Sol:
Correct : D. Goodwill
4. A firm’s goodwill is not affected by
Sol:
Correct : D. None of the Above
5. Weighted average method of calculating goodwill is used when
Sol:
Correct : B. Profits show an increasing or decreasing trend
6. Under the capitalisation method, the formula for calculating the goodwill is
Sol:
Correct : C. Super 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 12,00,000. The value of goodwill of the company as per the
capitalisation method will be
Correct : C. RS 7200000
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 capitalisation of
average actual profit will be
Correct : D. Rs 100000
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
Sol:
Correct : B. Reconstitution of Partnership
10. Goodwill is nothing more than probability that the old customer will resort to the old
place. This definition of goodwill was given by:
Correct : C. Lord Elton
11. Goodwill is to be calculated at one and half year’ purchase of average profit of last 5
years. The firm earned profits during 3 years as ₹ 20,000 ₹ 18,000 and ₹ 9,000 and suffered
losses of ₹ 2,000 and ₹5,000 in last 2 years. The amount of goodwill will be
Correct : A. Rs 12000
12. When there is no Goodwill Account in the books and goodwill is
raised,…………….account will be debited
Sol:
Correct : B. Goodwill
13. The amount of goodwill is paid by new partner :
Sol:
Correct : B. for sharing the profit
14. At the time of admission of a new partners general reserve appearning in the old Balance
Sheet is transferred to:
Correct : C. Old Partners’. Capital Accounts
15. An asset which does not have a physical form but has the potential to have a monetary
value is known as an -------------
Sol:
Correct : C. Intangible Asset
16. Valuation of ------------- Assets is difficult.
Sol:
Correct : A. Intangible
17. Following are forms of Intangible assets.
Sol:
Correct : C. Brand, Trademark, Copyrights, Know how
18. The value of Intangible assets is ------------- over a period of time.
Sol:
Correct : A. Amortized
19. The following statement stands true when intangible assets are compared to the current
assets
Sol:
Correct : C. Useful life is long
20. This is the feature of Intangible assets
Sol:
Correct : C. They may be internally created or purchased
21. Intangibility refers to ------------------
Sol:
Correct : C. Absence of physical form and creation.
22. An exclusive legal right in the form of Logo, Brand, Symbol, Name of Design is known as ---- Sol:
Correct : A. Trademark
23. A unique name of symbol or design given to a product or service for easy identification
and distinguishing it from the competitor is known as---------
Correct : C. Brand
24. A bundle of rights given by law to the creators of literary, artistic, dramatic, musical work
is known as
Sol:
Correct : C. Copyrights
25. An exclusive right given to an entity of individual or business firm to manufacture or sell
an invention is known as
Sol:
Correct : C. Patent right
26. From the profits of previous three years, Rs 150000, Rs 200000, and Rs250000/- the value
of goodwill at five years of purchase is -----------
Sol:
Correct : C. Rs10,00,000/-
27. From the profits of previous three years, Rs 150000, Rs 300000, and Rs250000/- and the
loss in a year ( Rs. 100000/-) the value of goodwill at three years of purchase is ---------
Correct : C. Rs 4,50,000
28. If Average Profit of a certain firm for last five years is Rs5,00,000 , Normal profit is Rs
3,50,000/-. What would be the Value of Goodwill at 3years purchase of super profit
Correct : C. Rs 4,50,000
29. Goodwill is defined as
Sol:
Correct : A. Intangible asset
30. Weighted average method of calculating goodwill is used when
Sol:
Correct : B. Profits show a trend
31. 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
Correct : C. 7200000
32. 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
Sol:
Correct : D. 100000
33. If the amount of super profit is negative ,what des it indicate
Sol:
Correct : A. There is no goodwill
34. Which goodwill is recorded in the books of Accounts
Sol:
Correct : A. Purchase Goodwill
35. When does need valuation of Goodwill
Sol:
Correct : D. Both
36. Which methods of valuation of Goodwill
Sol:
Correct : D. All of the Above
37. Which factor affecting th value of Goodwill
Sol:
Correct : D. All of the Above
38. The profits of the last three years is 42000, 39000,45000. Value of goodwill of 2 years
purchase of average profit is
Correct : A. 84000
39. What do you mean by Super Profit
Sol:
Correct : A. Average profit – Normal profit
40. The excess of Average profit over normal profit is called
Sol:
Correct : A. Super profit
41. The monetary value of reputation of business is called
Sol:
Correct : A. Goodwill
42. The profits of the last three years is55000,50000,45000. Value of goodwill of 2 years
purchase of average profit is
Sol:
Correct : A. 100000
43. Which methods of valuation of Goodwill
Sol:
Correct : C. Both
44. Goodwill is an intangible Assets
Sol:
Correct : A. True
45. Goodwill be purchased
Sol:
Correct : A. True
46. Goodwill will have no effect on business Financial status
Sol:
Correct : A. True
47. What is Royalty?
Sol:
Correct : A. A payment is made for the use of Assets
48. Mining Royalty is based on
Sol:
Correct : A. Production
49. Patent Royalty is based on
Sol:
Correct : A. Production
50. Copyright royalty is based on
Sol:
Correct : A. Sales
51. Lessor is the …………
Sol:
Correct : A. Qwner
52. Lessee is the…………
Sol:
Correct : B. User
53. What is minimum Rent?
Sol:
Correct : A. Payment for use of land which is fixed
54. Minimum Rent is also called
Sol:
Correct : D. All of the above
55. Short working = …………………- Royalty Payable
Sol:
Correct : A. Minimum rent
56. The minimum rent can ……………………….be proportionately, if there is a stoppage
due to strike.
Sol:
Correct : B. Decrease
57. Royalty is a revenue expenditure to lessor
Sol:
Correct : B. False
58. minimum rent is also term as dead rent
Sol:
Correct : A. True
59. Royalty Account is ……
Sol:
Correct : A. Nominal account
60. Short working is ………….
Sol:
Correct : A. Excess of minimum rent over the actual royalty
61. Surplus is…………….
Sol:
Correct : B. Excess of actual royalty over minimum rent
62. When the royalty are less than the minimum rent ?
Sol:
Correct : A. Royalties account is debited with the actual amount of royalties earned
63. Which of the following statement is false?
Sol:
Correct : B. Lapsed short working is a real account
64. Which of the following statement is false
Sol:
Correct : B. Royalty receivable account is opened in the books of Lessor
65. In the books of Lessee , short working recovered amount is debited to
Sol:
Correct : A. Profit and loss account
66. If the royalty is less than minimum rent , the balance of royalty account at the end of the
year has to be transfer to
Sol:
Correct : C. Profit and loss account
67. In case f recoupment of shortworking, the lessee:
Sol:
Correct : C. Credit short working Account
68. Shortworking means……
Sol:
Correct : A. Excess of Minimum rent over royalty
69. Royalties are connected with the following types of business
Sol:
Correct : A. Mining
70. royalty is an agreement between the following person
Sol:
Correct : D. Lessor and lessee
71. Dead rent is also called …………
Sol:
Correct : B. Minimum rent
72. The objectives od fixing dead rent is ………..
Sol:
Correct : B. Landlord must receive a minimum amount in case of low output or sales
73. Shortworking can be recouped only out of ………………..
Sol:
Correct : A. Surplus
74. Royalties is calculated either on the basis of ………………..
Sol:
Correct : D. Both A and B
75. Shortworking not recouped is debited to P/L Account
Sol:
Correct : A. True
76. Recoupment of shortworking can be restricted or unrestricted
Sol:
Correct : A. True
77. Calculate units manufactured during the year; Units Sold – 500, Opening stock – 100;
Closing stock – 200
Sol:
Correct : D. 600
78. Minimum Rent in the first year Rs 1,00,000 and will be increased by Rs 10,000 p.a. for
three years and then after by 10% per year. What is the amount at the end of 6th year?
Correct : B. Rs 157300
79. Royalty is Rs 64,000, Minimum rent Rs 80,000. Strike is for 3 months with no work done,
Minimum rent to be reduced in proportion of time, find the amount paid to Landlord.
Correct : B. Rs 80000
80. What is the example of wasting assets
Correct : B. Mine
81. Who is the person take the property on the lessee agreement
Correct : B. Lessee
82. Royalty is an ………………….to lessee
Correct : B. Expense
83. When the lessor receives payment, the credits—
Correct : A. Lessee account
84. The balance of royalty‟s receivable account is transferred to —
Sol:
Correct : A. Profit and loss account
85. The balance of royalty payable account is transferred to—
Sol:
Correct : C. Production account
86. Under the average clause, the loss is suffered by both insurer and insured in the ratio of
risk covered
Sol:
Correct : A. True
87. ………………..account is credited when lessor receive an amount
Sol:
Correct : A. Lessee Account
88. Royalty is an income to lessee
Sol:
Correct : B. False
89. Fixed payment made for the used of an assets is called Financial Lease
Sol:
Correct : B. False
90. Patent Royalty is based in Sales of a Product
Sol:
Correct : B. False
91. Shortworking is Excess of Minimum Rent over Actual Production
Sol:
Correct : B. False
92. Royalty is Rs 44,000, Minimum rent Rs 50,000. Strike is for 2 months with no work done,
Minimum rent to be reduced in proportion of time, find the amount paid to Landlord.
Correct : B. Rs 50000
93. Short working is a type of taxes paid by the lessee
Sol:
Correct : B. False
94. Recoupment is always necessary in royalties
Sol:
Correct : B. False
95. A person who take property on lease is called customer
Sol:
Correct : B. False
96. Royalty accounting is covered under Companies Act 1956
Sol:
Correct : B. False
97. Partnership firm is constituted under the….
Correct : A. indian partnership act 1932
98. The maximum number of Partners which can be allowed as partners in a firm are…
Correct : B. 20
99. The limit on the number of partners is indirectly placed by…
Correct : C. the companie\s act
100. In peicemeal distribution of cash, the first external liabilities to be paid are…