Are fictitious asset and deferred revenue expenditure are same No, fictitious asset and deferred revenue expenditure are not the same. A fictitious asset is a non-monetary asset that has no physical substance and cannot be seen or touched. It represents an expense that has been paid for in advance, such as prepaid expenses or deferred… Read More »
Income tax demand a contingent liability Yes, the interest on income tax demand is a contingent liability because it is a potential obligation that arises from an event that has already occurred, which is the assessment of additional income tax. However, the final amount of interest payable may depend on various factors, such as the… Read More »
Deferred Revenue Expenditure A deferred revenue expenditure refers to an expense incurred by a business that is expect to provide benefits over multiple accounting periods. Instead of recognizing the entire expenditure as an expense in the year it is incurred, the business spreads the cost over the period during which the benefits are… Read More »
Debit expenses and Credit revenues In accounting, we debit expenses and credit revenues because it follows the principle of double-entry bookkeeping. This principle states that every financial transaction has two equal and opposite effects: a debit entry and a credit entry. To visit- https://www.mca.gov.in/ Expenses always come in debit because they represent a decrease in… Read More »
Nominal Account In accounting, a nominal account is a general ledger account that is use to record revenues, expenses, gains, and losses for a specific accounting period. These accounts are also known as income statement accounts or temporary accounts. Because their balances are reset to zero at the end of each accounting period, typically a… Read More »