12th Accountancy - Book Back Answers - Unit 4 - English Medium Guides

  

 

12th - Accountancy - Book Back Answers -  Unit 4 - English Medium

Tamil Nadu Board 12th Standard Accountancy - Unit 4: Book Back Answers and Solutions

    This post covers the book back answers and solutions for Unit 4 –  from the Tamil Nadu State Board 12th Standard Accountancy textbook. These detailed answers have been carefully prepared by our expert teachers at KalviTips.com.

    We have explained each answer in a simple, easy-to-understand format, highlighting important points step by step under the relevant subtopics. Students are advised to read and memorize these subtopics thoroughly. Once you understand the main concepts, you’ll be able to connect other related points with real-life examples and confidently present them in your tests and exams.

    By going through this material, you’ll gain a strong understanding of Unit 4 along with the corresponding book back questions and answers (PDF format).

Question Types Covered:

• 1 Mark Questions: Choose the correct answer, 
• 2 Mark Questions: Very Short Answer Questions
• 3, 4, and 5 Mark Questions: Short Answer Questions, Excercises
  

All answers are presented in a clear and student-friendly manner, focusing on key points to help you score full marks.

All the best, Class 12th students! Prepare well and aim for top scores. Thank you!

Topic: Unit 4 :Goodwill In Partnership Accounts

I. Choose the correct Answer

Question 1.
Which of the following statements is true?
(a) Goodwill is an intangible asset
(b) Goodwill is a current asset
(c) Goodwill is a fictitious asset
(d) Goodwill
Answer Key:
(a) Goodwill is an intangible asset

Question 2.
Super profit is the difference between ………………..
(a) Capital employed and average profit
(b) Assets and liabilities
(c) Average profit and normal profit
(d) Current year’s profit and average profit
Answer Key:
(c) Average profit and normal profit
 
Question 3.
The average rate of return of similar concerns is considered as ………………..
(a) Average profit
(b) Normal rate of return
(c) Expected rate of return
(d) None of these
Answer Key:
(b) Normal rate of return

Question 4.
Which of the following is true?
(a) Super profit = Total profit / number of years
(b) Super profit = Weighted profit / number of years
(c) Super profit = Average profit – Normal profit
(d) Super profit = Average profit x Years of purchase
Answer Key:
(c) Super profit = Average profit – Normal profit

Question 5.
Identify the incorrect pair ………………..
(a) Goodwill under Average profit method – Average profit x Number of years of purchase
(b) Goodwill under Super profit method – Super profit x Number of years of purchase
(c) Goodwill under Annuity method – Average profit x Present value of annuity factor
(d) Goodwill under Weighted average profit method – Weighted average profit x Number of years of purchase
Answer Key:
(c) Goodwill under Annuity method – Average profit x Present value of annuity factor

Question 6.
When the average profit is RS 25,000 and the normal profit is RS 15,000, super profit is ………………..
(a) RS 25,000
(b) RS 5,000
(c) RS 10,000
(d) RS 15,000
Answer Key:
(c) RS 10,000
 
Question 7.
Book profit of 2017 is RS 35,000; non – recurring income included in the profit is RS 1,000 and abnormal loss charged in the year 2017 was RS 2,000, then the adjusted profit is ………………..
(a) RS 36,000
(b) RS 35,000
(c) RS 38,000
(d) RS 34,000
Answer Key:
(a) RS 36,000

Question 8.
The total capitalized value of a business is RS 1,00,000; assets are RS 1,50,000 and liabilities are RS 80,000. The value of goodwill as per the capitalization method will be ………………..
(a) RS 40,000
(b) RS 70,000
(c) RS 1,00,000
(d) RS 30,000
Answer Key:
(d) RS 30,000

II.Very short answer questions

1.  What is goodwill?

•  Goodwill is the good name or reputation of the business which brings benefit to the business. It enables the business to earn more profit.

 

2.  What is acquired goodwill?

•  Goodwill acquired by making payment in cash or kind is called acquired or purchased goodwill. The excess of purchase consideration over the value of net assets acquired is treated as acquired goodwill.

 

3.  What is super profit?

•  Super profit is the excess of average profit over the normal profit of a business. 
•  Super profit = Average profit – Normal profit

 

4.  What is normal rate of return?

•  Normal rate of return, it is the rate at which profit is earned by similar business entities in the industry under normal circumstances.

 

5.  State any two circumstances under which goodwill of a partnership firm is valued.

•  When there is a change in the profit-sharing ratio.
•  When a new partner is admitted into a firm.

 

 

III. Short answer questions 

1.State any six factors determining goodwill.

1. The profitability of the firm
2. Favourable location of the business enterprises
3. good quality of goods or services offered
4. Tenure of the business enterprises
5. Efficiency of management.
6. Degree of Competition

1.  How is goodwill calculated under the super profit’s method?

•  super profit is the base for calculation of the value of goodwill. Super profit is the excess of average profit over the normal profit of a business.
• Super profit = Average profit – Normal profit
• Normal profit = Capital employed × Normal rate of return
• Capital employed = Fixed assets + Current assets – Current liabilities
•  Normal rate of return = It is the rate at which profit is earned by similar business entities in the industry under normal circumstances.

2.  How is the value of goodwill calculated under the capitalization method?

•  Under this method, value of goodwill is calculated by capitalizing the super profit at normal rate of return, that is, goodwill is the capitalized value of super profit.
• Good will = (Super profit/Normal rate of return) x 100
  

 

IV. Excercises

12th Accountancy