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What is the treatment for PRELIMINARY EXPENSES?
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Answer / venu
This is the expenses,which incurred for Formation and flow
of the comany..The expenses can include the Cost of
producing Procpectus,issuing shares and advertising
expenses..
Note:-What ever i gave example that is belong to shares,
These can be belong to assets also....
| Is This Answer Correct ? | 114 Yes | 30 No |
Answer / narendra kumar
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.
| Is This Answer Correct ? | 93 Yes | 19 No |
Answer / vijay
Preliminary expenses are those expenses which are paid
before starting of a business unit
| Is This Answer Correct ? | 82 Yes | 16 No |
Answer / g. shanker
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
expernditure.
(a)In case of company, 5% of Cost of Project or Capital
employeed.
(b)In case of any other business, 5% of the Cost of Project.
It will be allowed as deduction in 5 equal installments.
| Is This Answer Correct ? | 69 Yes | 6 No |
Answer / ankit
This is the expenses, which incurred for Formation and flow
of the comany.The expenses can include the Cost of
producing Prospectus, issuing shares and advertising
expenses.
| Is This Answer Correct ? | 39 Yes | 13 No |
Answer / ashwni kumar swain
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
exp. etc.
| Is This Answer Correct ? | 28 Yes | 5 No |
Answer / mohd.nadeem ansari
prelimnary expences is a expences which spend before the
business start (example,legal exp.,office making exp.)
| Is This Answer Correct ? | 28 Yes | 8 No |
Answer / ramesh rajani
Preliminary expenses are the expense mhich are paid in the
processing of company formulation. in other world they are
paid for bringing the company into existance.
As these expenses
1)are huge in amount,
2)are nonrecurring and
3)are not related with the day-today opretions
therefore it is not fair to treat it as revenue
expenditure.The total amount paid for such expenses are
first capitalised and shown in the balance sheet.thereafter
from this some portion is written off each year.
| Is This Answer Correct ? | 16 Yes | 4 No |
Answer / shradha singh
I Dont Know anything about Peliminary expenses
| Is This Answer Correct ? | 35 Yes | 25 No |
Answer / vikash didwania
If any preliminary expenditure incured for those activities
which are mentioned in A.S 26 then the entire expenditure
should be charged to P & L and if it incured in respect of
A.S 10 then it should be capitalised.
Apart from these only share issue expenditure should be
amortised in P & L account over the period of 5 year. The
term deferred revenue expenditure concept is no more exist.
| Is This Answer Correct ? | 8 Yes | 2 No |
(a) Rajesh Ltd. gives you the following information for the year ended 31st March, 2006: (i) Sales for the year Rs. 48, 00, 000. The Company sold goods for cash only. (ii) Cost of goods sold was 75% of sales. (iii) Closing inventory was higher than opening inventory by Rs.50,000. (iv) Trade creditors on 31.3.2006 exceed the outstanding on 31-3.2005 by Rs. 1, 00, 000. (v) Tax paid during the year amounts to Rs. 1, 50, 000. (vi) Amounts paid to Trade creditors during the year Rs. 35, 50, 000. (vii) Administrative and Selling expenses paid Rs. 3, 60, 000. (viii)One new machinery was acquired in December, 2005 for Rs. 6, 00, 000. (ix)Dividend paid during the year Rs. 1,20, 000. (x)Cash in hand and at Bank on 31.3.2006 Rs. 70, 000. (xi) Cash in hand and at Bank on 1. 4.2005 Rs. 50, 000. Prepare Cash Flow Statement for the year ended 31.3.2006 as per the prescribed Accounting Standard. (b) Define the teen "Operating Activities", "Investment Activities" and "Financing Activities" as per NA S-3 Send me this question answer in my mail Address please help me to how solve the question ( deepakgaire@gmail.com) plese plese
What do you mean by Preliminary Expences
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Audit 
