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How can a good business location affect its goodwill?

Answer and explanation

Correct answer: It can increase goodwill

A good business location is convenient for customers and can attract more of them. This may increase sales, earning capacity and the reputation of the business, thereby increasing its goodwill. Therefore, option A is correct; a good location neither converts goodwill into a liability nor always eliminates it. Exam tip: Remember location, quality, management and customer trust as important factors affecting goodwill.

Related tags

GoodwillLocationFactors Affecting GoodwillPartnership AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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