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P1 C3 VALUATION OF GOODWILL — Elements of Account STD 12 Commerce — Question

Gujarat BoardEnglish MediumSTD 12 CommerceElements of AccountP1 C3 VALUATION OF GOODWILL1 Mark
Question
State the demerits of simple average method of valuing the goodwill.
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Answer

Main demerits is of simple average method of valuing the goodwill are- $(1)$ Trend of increase or decrease in profit is ignored. $(2)$ Capital amount invested is not considered.

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