Preliminary Expenses are the Example of

Preliminary costs are those that are incurred before the business is incorporated and operations begin. These are seen as deferred revenue expenditure. Examples include the cost of incorporating a business and designing a logo. The expenses involved with forming a firm are also considered preliminary expenses. Every year, a portion of these expenses is charged to the profit and loss account.

Answer - Preliminary Expenses are the Example of Deferred Revenue Expenditure.

Spending to generate revenue in a subsequent accounting period is known as deferred revenue expenditure. To receive subsequent advantages, you must pay the initial expense in full. Deferred revenue expenditure must be recognized since a portion of it might be deducted annually about benefits received.

The accounting treatment for deferred income and expenses is based on widely-accepted accounting principles (GAAP). It specifically aids companies in adhering to the accounting guideline known as the "matching principle," which specifies that revenue and costs must be reported during the same accounting period. Only when the associated revenues may also be recorded concurrently can costs be included on the income statement.

Summary:

Preliminary Expenses are the Example of

Preliminary Expenses are the Example of Deferred Revenue Expenditure.

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