Priliminary expances are kind of huge expences(Ex.- project appraisal,
documentation, legal charges,cunsultancy fees etc.) which occured before the
business started functing. These expences are for the standing of business unit
and off course, the benefit of which will be ripe continuously in future. It has a
special nature of an asset in financial statements and as per prudent accounting
principal should be write off in P&L A/c in a defferd way over the years.
Preliminary expenses, which incurred for before
commencement of business. For setting up of any undertaking
or business (Preparation of feasibility report, project
report or for conducting market survey or any other survey
or engineering services relating to the business and Legal
charges for drafting any agreement for setting up or for
conduct of any business).
For Income tax purpose the following is the permissibe
(a)In case of company, 5% of Cost of Project or Capital
(b)In case of any other business, 5% of the Cost of Project.
It will be allowed as deduction in 5 equal installments.
Preliminary expenses which those exepenses during at the
time of formation of a new company such as preparation of
feasibility report, survey exp., preparation of memorandum
and Articules of Association, legal fees, advertisement
I know that rate of stock turnover = cost of goods sold/
average of stock.
average of stock = (opening stock + closing stock)/ 2
what happens if it is a new business with no opening stock?
do u take closing stock/2 or simply just take closing stock
as the average stock figure?
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sir.i jitendra surati have a query.aboutloss settelment.
i have loss of capital rs 26000/ and mr friend have loss of
rs106000/- as capital. how to compensate the loss by
sharing?how many i have to give to my friend ?
(A)26000+106000=132000 and i have to give him 66000?
or 40000 rs?