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Upcoming new partner will avail the profit ,generated by increase in revenue caused by deferred revenue expenditure but that partner will treat such expenditure as a loss because he is paying some amount in form a good goodwill for availing such profits in exchange of that goodwill. Is this statement right? First of all answer me in yes or no.?
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Upcoming new partner will avail the profit ,generated by increase in r...
Yes
Explanation:
Deferred Revenue Expenditure:
Deferred revenue expenditure is an expenditure that is incurred during a particular accounting period but its benefits are not fully received in the same period. Instead, the benefits are spread over a number of years. This expenditure is usually written off over a period of time.
Impact on Profit:
When a new partner joins the business and avails the profit generated by the increase in revenue caused by deferred revenue expenditure, they will benefit from the increased revenue. However, since the new partner is paying some amount in the form of goodwill to avail such profits, they may treat this expenditure as a loss in their books.
Treatment of Goodwill:
Goodwill is an intangible asset that represents the reputation, brand value, and customer loyalty of a business. When a partner pays for goodwill, they are essentially paying for the future profit potential of the business.
Conclusion:
In conclusion, the statement is correct. The new partner will avail the profit generated by the increase in revenue caused by deferred revenue expenditure but may treat this expenditure as a loss because they are paying for goodwill to avail such profits. This is a common practice in business partnerships where one partner contributes assets or cash in exchange for a share of the profits.
Explanation:
Deferred Revenue Expenditure:
Deferred revenue expenditure is an expenditure that is incurred during a particular accounting period but its benefits are not fully received in the same period. Instead, the benefits are spread over a number of years. This expenditure is usually written off over a period of time.
Impact on Profit:
When a new partner joins the business and avails the profit generated by the increase in revenue caused by deferred revenue expenditure, they will benefit from the increased revenue. However, since the new partner is paying some amount in the form of goodwill to avail such profits, they may treat this expenditure as a loss in their books.
Treatment of Goodwill:
Goodwill is an intangible asset that represents the reputation, brand value, and customer loyalty of a business. When a partner pays for goodwill, they are essentially paying for the future profit potential of the business.
Conclusion:
In conclusion, the statement is correct. The new partner will avail the profit generated by the increase in revenue caused by deferred revenue expenditure but may treat this expenditure as a loss because they are paying for goodwill to avail such profits. This is a common practice in business partnerships where one partner contributes assets or cash in exchange for a share of the profits.
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Upcoming new partner will avail the profit ,generated by increase in revenue caused by deferred revenue expenditure but that partner will treat such expenditure as a loss because he is paying some amount in form a good goodwill for availing such profits in exchange of that goodwill. Is this statement right? First of all answer me in yes or no.?
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Upcoming new partner will avail the profit ,generated by increase in revenue caused by deferred revenue expenditure but that partner will treat such expenditure as a loss because he is paying some amount in form a good goodwill for availing such profits in exchange of that goodwill. Is this statement right? First of all answer me in yes or no.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Upcoming new partner will avail the profit ,generated by increase in revenue caused by deferred revenue expenditure but that partner will treat such expenditure as a loss because he is paying some amount in form a good goodwill for availing such profits in exchange of that goodwill. Is this statement right? First of all answer me in yes or no.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Upcoming new partner will avail the profit ,generated by increase in revenue caused by deferred revenue expenditure but that partner will treat such expenditure as a loss because he is paying some amount in form a good goodwill for availing such profits in exchange of that goodwill. Is this statement right? First of all answer me in yes or no.?.
Upcoming new partner will avail the profit ,generated by increase in revenue caused by deferred revenue expenditure but that partner will treat such expenditure as a loss because he is paying some amount in form a good goodwill for availing such profits in exchange of that goodwill. Is this statement right? First of all answer me in yes or no.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Upcoming new partner will avail the profit ,generated by increase in revenue caused by deferred revenue expenditure but that partner will treat such expenditure as a loss because he is paying some amount in form a good goodwill for availing such profits in exchange of that goodwill. Is this statement right? First of all answer me in yes or no.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Upcoming new partner will avail the profit ,generated by increase in revenue caused by deferred revenue expenditure but that partner will treat such expenditure as a loss because he is paying some amount in form a good goodwill for availing such profits in exchange of that goodwill. Is this statement right? First of all answer me in yes or no.?.
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