unit-17-balance-sheet

Unit-17 Balance Sheet

Learn about the Balance Sheet which is prepared for ascertaining the financial position of the business as at the end of an accounting year.

What are Fictitious Assets?

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Learning Pundits Content Team

Written on Jun 26, 2019 12:20:30 PM

Fictitious Assets are the assets not represented by any tangible or intangible property. They are shown as assets in the Balance Sheet simply because their accounts show debit balances. They usually represent unwritten off expenses and losses. For example, expenses incurred at the time of formation of a company (called preliminary or formation expenses) are not charged in full to Profit and Loss Account in the same year in which they are incurred. The unwritten off portion of such an expense will be shown as an asset in the Balance Sheet. Other examples of fictitious assets are: discount on issue of shares or debentures, expenditure on advertising campaign or any other deferred revenue expenditure.



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