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If average profit is equal to normal profit, what will be the super profit?

Answer and explanation

Correct answer: Nil

Super profit = Average Profit − Normal Profit. When average profit and normal profit are equal, their difference is zero; therefore, super profit is nil. Option B is incorrect because super profit is the difference between the two profits, not the entire average profit. Exam tip: Write the super profit formula first in goodwill problems.

Related tags

GoodwillSuper ProfitPartnership AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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