--%>
Assignment Help - homework help

Fictitious Assets

Define the terms Fictitious Assets?

E

Expert

Verified

There are some expenditures or expenses, the benefit of which is not restricted to one specific year. Hence, the whole of such expenses can’t be charged to the gain and loss account at once and therefore they are deferred.

For example: Discount of Issue of Debentures, Share Issue Expenses, and so forth.

As well the debit balance of Profit and Loss Account (loss) is a Fictitious Asset. This is to be cancelled out or adjusted with gain of subsequent years or reserves.

Fictitious Assets are not the assets, that are tangible and visible such as machinery, buildings, computer however the expenditure on several activity, that is considered as a Capital expenditure rather than Revenue expenditure. Whenever expenditure incurred amount is not debited to gain and loss A/C however shown as fictitious asset and over a period the amount is written off or debited to P & L account. For illustration Share issue expenses by a Corporate, it is not debited to P& L. Account in the year in which it is incurred however debited in installments as decided by the Management over few years. 

   Related Questions in Financial Accounting

  • Q : Case study of an Operational-Strategy

    Develop a case study of the Operational-Strategy interface as it applies to organisational change (last 3-5 years) within your organisation, together with a project implementation case study .You are required to detail the operational chan

    		•
  • Q : Cash Discount State the definition of

    State the definition of Cash Discount?

    		•
  • Q : Asian firms building the production

    Since NAFTA was developed, several Asian firms particularly those from the Korea and Japan has made the extensive investments in the Mexico. Why do you think these Asian firms decided to build the production facilities in the Mexico?

    		•
  • Q : Highlights of Lobbying Define the term

    Define the term Lobbying in the the act of attempting to persuade affiliates of a legislative body to cast their vote in favor of the lobbyist.

    		•
  • Q : Investment in Value trust What is your

    What is your recommendation concerning investment with/in the Value Trust? a.  Why do you recommend? b.  Why don’t you recommend?

    		•
  • Q : Japanese investments in the Southeast

    Japanese MNCs, like Toshiba, Toyota, Matsushita, and so on, made extensive investments within the Southeast Asian countries such as Malaysia, Thailand, and Indonesia. State your opinion, what forces are making Japanese investments within the region?

    		•
  • Q : Objectives of Bretton Woods’s system

    State main objectives of Bretton Woods’s system?

    		•
  • Q : Prepare relevant ledger accounts

    Journalize the below transactions, prepare relevant ledger accounts and finally trial balance. . XYZ Pvt Ltd 01.01.2009 Started business

    		•
  • Q : Define Budget Manual Give a short

    Give a short introduction of the term ‘Budget Manual’?

    		•
  • Q : Case study of a global economy The

    The economic recovery is seemingly on track and in fact strengthened during the first half of 2010. The global financial market however, suffered a setback with the turmoil in sovereign debt markets leading to sharp currency movements. The extent of recovery varies ac

    		•