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Financial Statement

Accountancy

Preliminary expenses if given in adjustment , what will be the impact in the financial statement ?

Srini Sriram

CA Final

★ 3K+

17-Aug-20 14:44

308

Answers (4)

They are expenses incurred prior to incorporation hence treated as intangible asset. Debit the preliminary expenses A/c and Credit the Profit & Loss A/c for the amount determined as preliminary expenses. The preliminary expenses will be written off in five years.