Question

2. Which method of is to be used for the valuation of goodwill at the

time of increasing trend of the profit?

a. Simple Average Profit
b. Weighted Average Profit

c. Capitalization of Average Profit
d. Method of Super Profit​

Answer 1

weighted average profit

Answer 2

Answer:

b. Weighted Average Profit

Explanation:

Average Profits Method

Weighted Average: Under this method, it is valued at agreed number of years' of purchase of the weighted average profits of the past years. The weighted average is used when there exists an increasing or decreasing trend in the profits.