Self-generated Goodwill is not purchased or bought for consideration but rather generated as a result of the hard work and efforts of the members of the firm. It, therefore, arises because of factors such as consistent quality, satisfied customers, favorable location, etc. Since all these factors are internal to an organization hence the goodwill is an internally generated goodwill boosting the revenues for the firm.
Features of Self-generated Goodwill
- As mentioned above, it arises out of the efforts of a firm over the years and hence is internally generated.
- Since the value of internally generated goodwill cannot be traced back to a cost source hence its accurate and reliable value is very difficult to determine.
- The valuation is based on the perspective of the valuer and hence is completely subjective.
Profit and Loss Account
A profit and Loss Account is the second financial statement prepared by an organization. This account is prepared to ascertain the net results of a firm in form of net profit earned or net loss incurred during an accounting period.
Accounting software is an integral part of the computerized accounting system. The accounting software should be selected after considering the level of skill and proficiency of the accounting professionals.
What are Accounting Reports?
Accounting Reports: When the collected data is processed and manipulated in a useful sense that can be understood by the users without any ambiguity, then it becomes information.
Transaction Processing System
Transaction Processing System (TPS) refers to a computerized system that records, processes, validates, and stores routine transactions that occur in various functional areas of a business on daily basis.