is preliminary expenses a fictitious assets

By | December 30, 2020

These are transferred to the profit and loss accounts and written off every year from the profits of the business. The fictitious assets are written off after the company obtains first earnings. … Preliminary expenses are the best example for _____. Periodical audit is also called as _____. Fictitious asset is used to account for expenses that are no related to real, tangible assets. Therefore, they are accounted as fictitious assets. These are the formation expenses of the company before any operation of the busines held. These expenses are shown on the assets of the balance sheet under the head Fictitious assets are such assets whose benefit is derived over a longer period of time, Like Deferred revenue expenditure, Misc. Fictitious assets are not real assets. Examples of fictitious assets are deferred revenue expenditure, preliminary expenses… Accounting related to Preliminary Expenses. Preko Isaac Boateng Link. Fictitious assets are those assets which are not tangible in nature & has no value. Nikhil Link. What is the fictitious assets? Such assets are written off as soon as possible, when the company earns first earnings. Good Job !! One asset classification is fictitious assets. Promotional expenses, Preliminary expenses, Discount allowed on issue of shares and Loss incurred on issue of debentures are examples of fictitious assets. These expenses are treated as fictitious because these are not actual assets. Comments on this entry are closed. The most common example is situation when the company begins its operation and expenses related to that start cannot be placed under normal account headings. _____ is an example for fictitious asset a) Machinery b) Patent c) Stock d) Preliminary expense Answer: Option [C] 22. you can also transfer whole amount in single year but for income tax purpose 1/5 of the amount will consider. The auditor of a government company shall be appointed by _____. Fictitious Assets are not assets in the real sense.It is the benefit of an expense to be enjoyed by the organisation over the future period of time.Eg:- Preliminary expenses,Advertising Campaign expenses,Discount on issue of shares and so on. Therefore, the whole of these expenses cannot be charged to the profit and loss account of the year, in which the amount is incurred. 9 Yes : 15 No : Post New Answer View All Answers. Examples of Fictitious Assets 1.Promotional expenses of a business. 2.Preliminary expenses. These expenses will be written off in 5 equal year installment in profit and loss A/c. Preliminary expenses are the nature of fictitious assets. A payment for freight on raw material purchased … They are a good example of fictitious assets which are written off every year from the profits earned by the business. These are the formation expenses of the company before any operation of the busies held. [B] Interim audit. Preliminary assets can be found on assets side of balance sheet. 1,00,000 on condition that all profits earned from 1.1.2009 shall belong to the company. Forms of income statement are – What Are Fictitious Assets? sumithra Link. Preliminary expenses are of the nature of fictitious assets. Is This Answer Correct ? Legal expenses incurred in purchasing land, property represent: a) Capital expenditure b) Revenue expenditure c) Revenue loss d) Deferred revenue expenditure 109. We use fictitious assets are to keep track of assets that cannot be recorded under normal accounting categories, such as prepaid expenses, refundable deposits or deferred interest. [B] intangible asset. Answer: Option [A] 21. Fictitious assets: Its not the actual assets , its the expenditure occurred at the tine of commencement of firm ( capital expenditure )like preliminary expenses, discount on issue on debenture/shares, underwriting commission etc. Accounting for preliminary Expenses: The benefit of the preliminary expenses is long-term so it is treated as intangible asset and shown in Balance sheet under Missilinous assets. What is a fictitious asset? How ever Accounting standard 26 says a period 10 years for writing off intangible asset. Other Non-Current Assets: Patent Rights, Trade Marks, Goodwill, Preliminary Expenses, and Discount on issue of Shares or Debenture, P & L A/c (Dr. Balance), i.e. They are like preliminary expenses, P& L … They are not taken over in the process of M & A. These expenses are written off over a period of 3-4 years and till they are written off, they are depicted in the balance sheet as non-current assets. In most of the cases these preliminary expenses are treated as intangible asset and shown on the asset side of the balance sheet under head miscellaneous asset. Basically, they are amortized over a period of time. This Video Give the Basic Concept of Preliminary Expenses And Primary Expenses ? Fictitious Assets. Examples are so usefull. These are the expenses of the company incurred before the incorporation of the company. [D] floating asset. [A] Final audit. Preliminary expenses is an example of- This objective type question with answer for competitive exams is provided by Gkseries. Ans. [C] Balance sheet audit. 35. Ans : d 36. other than current assets. … In the assets side of company s balance sheet, fictitious asset like discount on issue of debentures are shown under the heading _____ a) Fixed assets b) Investments c) Current assets d ) Miscellaneous expenditure 46. Urdu / Hindi My Recommenmd Amazing Gears & Products: 1. 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