Answer / bharat

Preliminary Expenses are to be written off out Securities
Premium Account or it may be written off out of the Profit
& Loss A/c gradually over some period. The balance left of
preliminary expenses is to be shown in the asset side of
the balance sheet of the company under the heading
of ‘Miscellaneous Expenditure’.

Answer / sahilesh pathak

Expensed made before the cmencement of business and accured
before the comencment of business are called preliminary
expenses.

Answer / kamruzzaman khan

Preliminary Expenses are incurred to form a company like
Fees in relation to RJSC (Registrar of Joint Stock
Companies), Consultancy paid to formation consulant, Fees
related to obtain Trade License etc. These are presented at
Balance Sheet as Fictitious Assest under the head
Miscellaneous Expenses. These should be amortize as per
over the years but IAS recommend to amortize these within
the first year of operation.

Answer / rachan kumar

Expenditure incurred for the incorporation of a company, before the company has come into existence.

Example: Legal charges paid, fees paid to company secretary, expenses towards printing and vetting of Memorandum and
articles of Association, Commission paid to underwriters connected with issue of shares etc.,

These expenses are fictitious in nature. These are shown on the Asset side of the balance sheet under the head "Miscellaneous Expenditure" and a part of it is written off every year by debiting the Profit & loss A/c

Answer / girindra kumar jha

it is the expense which ocurred at the time of commencement
of a business. it is shown in the assets side of balance
sheet for two reason,first to complete accounting equation
and 2nd to cover those expense in next different year.

Answer / sushma.k

preliminary expenses incurred at the time of formation of a
company.These expenses written off every year from the
profits of the business,these expenses shown under asset
side of the balancesheet under the head miscellaneous
expenses.

Answer / kumar sujeet

It is the expenses which is paid at the time of company
formation.
and the treatment will be :-it shown as a miscellaneous
expenses in the asset side. As per rule and condition it
will be adjusted or write off in some years. shown in the
profit and loss account expenses side.by this it will be
automatically closed in some years ...

Answer / indranil

Preliminary expenses are those expenses that are incurred
before the commence of business of a limited or a pvt ltd
company. These are basically company formation expenses like
registration charge, memorandum and articles fees and other
registration expenses. This is not a fixed asset and as per
AS-26 the same needs to be charged off in the Profit & Loss
account in the first year of operation. However, when the
income tax computation of the company is made, only 1/5 th
expense becomes allowable in the year of occurence (Sec-35D
of Income Tax act. balance 4/5th part is carried forward and
adjusted with net profit in following four years.

Answer / mamatha

preliminary expenses are the expenses which are used for establishment of the business and it is also useful for expansion and promotion of the business.

Answer / nitesh

preliminary expenses are the expenses which accure at the
time of starting of the business as registration fees.
and they are shown in balance sheet because they are fictios asset

What do you mean by custodian/Depository, & what are the different types of Depository? (NSDL/CDSL)

0 Answers   Mellon,

expand D I N

2 Answers  

What is the treatment of Capital Work in Progress as per the International Accounting Standards.

0 Answers  

Expand---------STRP

2 Answers  

what is the need for accounting standard?

1 Answers  

EXPAND_________VT

1 Answers  

what is journal entry for Bad debts recovered

13 Answers   Genpact,

mention 3 types of cash book

5 Answers   ECDS, Ford,

hi.. inthe month of june our expenses 540.petty cash replenishment we received 530. in the next month we received the balance 10 and july petty cash replenishment for 450 + 10. how to prepare jv. eg: subry expenses a/c 540 to cash 530 to ???? 10 july: sundry expenses 450 ??????????????? 10 to cash 460 pls help

1 Answers  

What is a Mutual Fund and its types?

1 Answers   Mellon,

My name is Tasha actually I had put my file for Australia PR on basis of Hairdresser, and I have shown my qualification of 10th passed, but I done my B.Com with Accountancy, and presently I am working as Accountant,Now I want to put up my file for Australia Student is it possible, and my age is 36 yrs, I had already given my IELTS (Academic) and I have scored 6 bands, but its period has been expired,please give me some answer what to do next.

0 Answers   Australia Visa,

From the following information you are to prepare a Cash Budget for the period from July to December 2008. (i) The estimated sales and expenses are as follows: June July Aug. Sep. Oct. Nov. Dec. Sales 35,000 40,000 40,000 50,000 50,000 60,000 65,000 Purchases 14,000 16,000 17,000 20,000 20,000 25,000 28,000 Wages & Salaries 12,000 14,000 14,000 18,000 18,000 20,000 22,000 Expenses 5,000 6,000 6,000 6,000 7,000 7,000 7,000 Interest Received 2,000 - - 2,000 - - 2,000 Sale of Fixed Assets - - 20,000 - - - - (ii) Sales are 20% in cash and balance on credit. 50% of the debtors are collected in the month of sales and the remaining in the next month. (iii) The time lag in payment of purchases and expenses is 1 month. However, wages and salaries are paid fortnightly with a time lag of 15 days. (iv) The company maintains a minimum cash balance of Rs. 5,000. The cash balance in excess of Rs. 7,000 is invested in government securities in multiples of Rs. 1,000. Short falls in cash balance are made good by borrowing from banks. The interest received as well as paid is to be ignored.

0 Answers   D M Systems, Ignou,