Preliminary expenses [Audio-Hindi Mix English] Accounts

Before incorporation and commencement of business, company and the promoters of the company may incurred so many types of expenses like statuary fees and company logo designing, in some cases rent for the office premises during the time of incorporation not after incorporation etc… These are all comes under preliminary expenses .in simple words preliminary expenses are the expenses that spent by the promoters before the incorporation of company

Click on Play Button

 

The benefit of the preliminary expenses is long-term so it is treated as intangible asset and shown in Balance sheet under Miscellaneous assets. These expenses will be written off in 5 equal year installment in profit and loss A/c. you can also transfer whole amount in single year but for income tax purpose 1/5 of the amount will consider.

Accounting Entries:

1. Preliminary Expense – Dr (Current Asset)

To Cash\\Bank

2. Preliminary Expenses Written Off – Dr (Indirect Expenses)

To Preliminary Expenses

Accounting & Finance for Banking

Principles & Practices of Banking Module E Pdf

Free
Module E PPB ePDFs available in our android app. Get them all at https://iibf.info/app

Accounting and Finance for Banking Module A Pdf

Free
Accounting and finance for bankers all ePDFs are available in our an app. Get them all at https://iibf.info/app

Accounting and Finance for Banking Module A Pdf

Free
Accounting and finance for bankers all ePDFs are available in our an app. Get them all at https://iibf.info/app

Leave a reply

Please enter your comment!
Please enter your name here

Learning Sessionshttps://iibf.info
Btech, JAIIB CAIIB and a tutor. Have taken more than 400+ hours online classes with more than 1,00,000 students

Popular

Free Live Classes

More from author

[NEW] Asset Reconstruction Company Norms

RBI has put restriction on the ARCs from buying financial assets from its sponsor firms and lenders (bank or financial institution) on a...

Jaiib 2021 Exam Syllabus, Dates, Pattern and Fee all Details

JAIIB EXAM Dates 2021 Junior Associate of the Indian Institute of Bankers Exam or JAIIB, as commonly called, is conducted as a career progression exam...

What is BANK RECONCILIATION STATEMENT? BRS in Detail

Bank Reconciliation Statement is a statement prepared to reconcile the balances of cash book maintained by the concern and pass book maintained by the...

Latest Exposure Norms in Banks by RBI

Exposure Norms OVERALL EXPOSURE LIMITS As prudential measure aimed at better risk management a avoidance of concentration of credit risks, RBI has advised the banks to...