GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Preliminary expenses
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Depreciation on fixed assets
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Heavy advertisement expenditure
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Expenses incurred in removing the business to more convenient premises
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Detailed explanation-1: -Depreciation on fixed assets Was this answer helpful?
Detailed explanation-2: -Depreciation represents the periodic, scheduled conversion of a fixed asset into an expense as fixed asset is used during normal business transactions. Since the asset is part of normal business operations, depreciation is considered as revenue expense.
Detailed explanation-3: -Therefore, depreciation on such property can only be accounted for after considering the gain it has brought the business and the loss in value it has accumulated over its existence in the company, making it a deferred expense.
Detailed explanation-4: -Amount spent on mega advertisement campaign for launching a product is though a revenue expenditure but it is going to give the benefit in future too, hence this is considered as deferred revenue expenditure.