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If average profit is rupees ninety thousand and normal profit is rupees one lakh ten thousand what conclusion follows under super profit method?

Answer and explanation

Correct answer: There is no super profit so goodwill may be taken as nil

Average profit is less than normal profit so no super profit arises. In this method goodwill depends on extra profit.

Related tags

GoodwillSuper-ProfitNegative-Super-ProfitReasoningPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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