what is the meaning of preliminary expenses and how you
shown in balance sheet
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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’.
| Is This Answer Correct ? | 17 Yes | 11 No |
Answer / sahilesh pathak
Expensed made before the cmencement of business and accured
before the comencment of business are called preliminary
expenses.
| Is This Answer Correct ? | 7 Yes | 2 No |
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.
| Is This Answer Correct ? | 7 Yes | 3 No |
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
| Is This Answer Correct ? | 5 Yes | 1 No |
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.
| Is This Answer Correct ? | 5 Yes | 2 No |
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.
| Is This Answer Correct ? | 4 Yes | 1 No |
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 ...
| Is This Answer Correct ? | 4 Yes | 1 No |
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.
| Is This Answer Correct ? | 3 Yes | 0 No |
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.
| Is This Answer Correct ? | 4 Yes | 2 No |
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
| Is This Answer Correct ? | 3 Yes | 1 No |
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