A business has gained good reputation. Can this be valued in terms of money and be recorded in the books of accounts?
Answers
Answer:
Goodwill is the value of a firm's reputation and its good brand name in the market. It is valued in terms of money. Goodwill is considered as an intangible asset of a firm.
Goodwill is one of the special aspects of partnership accounts which requires adjustment (also valuation is not specified) at the time of reconstitution of a firm. Over a period of time, a well-established business develops an advantage of good name, reputation and wide business connections. This helps the business to earn more profits as compared to a newly set up business. In accounting, monetary value of such advantage is known as "goodwill". It is regarded as an intangible asset. In other words, goodwill is the value of the reputation of a firm in respect of the profits expected in future over and above the normal profits.
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Answer:
goodwill
Explanation:
goodwill is the intangible assets of business valued in terms if money