The adjustment required for overvaluation of closing stock, while calculating adjusted profit for calculating goodwill is
(A) reduction from concerned year's profit.
(B) reduction from next year's profit.
(C) addition to next year's profit.
(D) addition to previous year's profit.
Choose the correct answer from the options given below:

Correct option is B

Overvaluation of closing stock needs to be corrected by reducing the concerned year's profit (A) to reflect the accurate profit level. Additionally, since the closing stock of one year becomes the opening stock of the next year, it is added to the next year's profit (C) to adjust for the overvaluation, ensuring accurate profit calculation for goodwill purposes.