Question : Assertion (A): Over a period of time, a well-established business develops an advantage of good name, reputation and wide business connections. Reason (R): Self-generated goodwill is shown as an asset in the books.
Option 1: Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A)
Option 2: Both Assertion (A) and Reason (R) are true but Reason (R) is not the correct explanation of Assertion (A)
Option 3: Assertion (A) is true but Reason (R) is false
Option 4: Assertion (A) is false but Reason (R) is true
Correct Answer: Assertion (A) is true but Reason (R) is false
Solution : Over a period of time, a well-established business develops an advantage of good name, reputation and wide business connections. Self-generated goodwill is not shown as an asset in the books. Hence, the correct option is 3.
Question : Assertion (A): A new business is likely to have lesser goodwill. Reason (R): Goodwill is an intangible asset.
Question : Assertion (A): An older business is likely to have lesser goodwill. Reason (R): The number of customers of an older business will be more in comparison to the customers of new entrants.
Question : In the following questions, a statement of Assertion (A) is followed by a statement of Reason (R). Mark the correct choice as :
Assertion (A) : Sale of Fixed Asset is written under Investing Activity.
Reason (R) : Sale of Fixed asset leads to inflow of
Question : Assertion: Unemployment and poverty go hand in hand. Reason: Poverty is a result of unemployment
Question : Assertion (A): Dissolution of Partnership may or may not result into closing down of the business. Reason (R): Dissolution of Partnership firm means close down of business and comes to an end.
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