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what is the meaning of preliminary expenses and how you
shown in balance sheet
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Answer Posted / 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
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