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
16. Eurodollars are best described as ===============
a) The new currency of the European Union
b) A U.S dollar denominated deposit ….generally in a
bank located outside the United States …that is not subject
to US banking regulation.
c) A currency deposited outside its country of origin
d) A foreign..denominated deposit subject to US
Why Copyrights,patents,goodwill etc.etc. falls under real
account and not nominal or personal account?
I know anything which affect trading & Profit & Loss
accounts are nominal accounts.And the above do not affect
the Trading or P/L accounts but on the other hand they are
intangible and neither can they fall under real accounts as
Real accounts are those that are not personal and they are
Again in another way if we see, Patents, Copyright ,Goodwill
etc. etc. kindoff acts as a representative of a person or a
company like in the same way as a Bank or Company name,so
they can they not fall under Personal Account??