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Question
Solution
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Goodwill
Explanation:Goodwill is an intangible asset of the firm. It is the value of firm’s reputation and good brand name in the market. A firm earns goodwill by its hard work and thereby winning the blind trust and faith of its customers by fulfilling their demand in both qualitative and quantitative aspects. A positive goodwill helps the firm to earn supernormal profits compared to its competitors that earns normal profits (which is equal to zero).
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Answer in one sentence only.
When is goodwill account raised in the books of the firm?
Write the word/term or phrase which can substitute the following statement.
Name of intangible asset having a value.
Write the word/term or phrase which can substitute the following statement.
Account which is credited when goodwill is withdrawn by old partners.
Explain various methods for the treatment of goodwill on the admission of a new partner?
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