Question : Average of the profit of past agreed years is known as __________.
Option 1: super profit
Option 2: normal profit
Option 3: average profit
Option 4: capital employed
Correct Answer: average profit
Solution : Answer = average profit
The average profit of past agreed years refers to the mean value of profits earned over a specific period. It provides a standard measure of the company's historical earnings performance, serving as a reference point for assessing current and future profitability. This average profit helps in evaluating business stability and growth potential.
Average profit = total profits/no. of years Hence, the correct option is 3.
Question : Capital invested in the firms business is termed as
Question : Under the super profit method, goodwill is calculated by
Question : Under average profit methods goodwill is calculated as
Question : When a similar type of business earns profit at a standard percentage of the Capital employed, it is called __________ .
Question :
The Formula for Capitalisation of Super Profit Method is:
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