The correct sequence involved in calculation of goodwill by weighted average profit method is:A. Adjust the profit taking into account abnormal gain/losses B. Multiply the weighted average profit by number of years of purchase.C. Assign weight to each years profit  D. Find out weighted average profit by dividing total weighted profit by total weight.E. Find out weighted profit. Choose the correct answer from the options given below: – Answer & Explanation | CUET Subject PYQ – Dubuddy

The correct sequence involved in calculation of goodwill by weighted average profit method is:
A. Adjust the profit taking into account abnormal gain/losses B. Multiply the weighted average profit by number of years of purchase.
C. Assign weight to each years profit  D. Find out weighted average profit by dividing total weighted profit by total weight.
E. Find out weighted profit. Choose the correct answer from the options given below:

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A
A, C, E, D, B
B
A, B, C, D, E
C
B, C, D, E, A
D
C, D, E, A, B
Correct answer

Correct Answer

A, C, E, D, B
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Detailed Explanation

The sequence "A, C, E, D, B" corresponds to the steps involved in the calculation of goodwill by the weighted average profit method, as you provided earlier. Here's what each step stands for:

  1. A. Adjust the profit taking into account abnormal gain/losses.
  2. C. Assign weight to each year's profit.
  3. E. Find out weighted profit.
  4. D. Find out weighted average profit by dividing the total weighted profit by the total weight.
  5. B. Multiply the weighted average profit by the number of years of purchase.

So, this sequence is indeed the correct order for calculating goodwill using the weighted average profit method.

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