Multiple choice

Which of the following can be used to calculate net capital employed for calculation of goodwill?

  1. Fixed assets plus current assets only

  2. Fixed assets plus current assets minus current liabilities only

  3. Partner's capital plus free reserves only

  4. Both (2) and (3)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

This is the correct answer. The net capital employed can be calculated by both (1) and (2) methods.

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