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Financial Statement

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


Srini Sriram

Srini Sriram

CA Inter

3K+

17-Aug-20

88

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.


Lavanya Chitturi

Lavanya Chitturi

CA Inter

895

18-Aug-20

Did we credit it to the statement of p&l account or in liabilities side ?


Thread Starter

Srini Sriram

Srini Sriram

CA Inter

3K+

18-Aug-20

P&L acc and it reflects in asset side


Lavanya Chitturi

Lavanya Chitturi

CA Inter

895

18-Aug-20

Thank you ma'am


Thread Starter

Srini Sriram

Srini Sriram

CA Inter

3K+

18-Aug-20

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