Multiple choice

Which of the following items should be subtracted from the net profit to arrive at the figure of normal profits for the calculation of goodwill?

  1. Loss on sale of assets

  2. Winning from lottery

  3. Sale of goods not recorded earlier

  4. Voluntary compensation paid
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

It is the abnormal gain. So, it should be subtracted form the net profits.

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