--%>
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 Espresso Tax Seattle is

    Seattle is currently considering a 10-cent tax on espresso drinks to pay for pre-school and day-care programs. The legislation’s sponsor, Rep. Burbank, argues that people who spend $3-5 on exotic espresso based coffee drinks can afford – and will be &ldquo

    		•
  • Q : Financial report Details of Assignment

    Details of Assignment : You are required to form a team (group) of 3 to 4 m embers. Let your lecturer know the names of your team members. Select a set o f financial statements for a group of companies and obtain approval from your le cturer for the group of companies that you have selected.

    		•
  • Q : What is Assets in Accounting Assets are

    Assets are those resources that the business owns. Assets are the things of value owned which enable the firm to get cash or befit in future. There are mainly two types of assets: - Current assets & Fixed assets for e.g. cash, f

    		•
  • Q : Euro-medium-term-note market State

    State difference between the Euro-medium-term-note market, the Euro note market, and the Euro commercial paper market?

    		•
  • Q : Why depreciation is not charged on land

    Explain why depreciation is not charged on land?

    		•
  • Q : Creatives and Suites What happens when

    What happens when creativity based on individual exceptionalism has evolved as part of the orthodoxy of Western managerial practice is applied within a creative business organisation in the business of “symbolic production&rdquo

    		•
  • Q : Asset Owned by an entity, something

      Owned by an entity, something that provides benefits and whose cost can be measured. The measure of the value of assets in dollar appears on the

    		•
  • Q : Issuing dual currency bonds What

    What borrower must consider before issuing the dual currency bonds?

    		•
  • Q : Equity and social exchange theory What

    What is the difference between the equity theory and the social exchange theory ? Define both the theories in brief.

    		•
  • Q : Calculate the bad debt expense for the

    The Webster Company uses the aging method to estimate the allowance for doubtful accounts. The following schedule of accounts receivable was prepared as at December 31, 20x6: Age Balance %

    		•