Question

Which of the following is a fictitious Asset?

Options

• Income Tax

• Goodwill

• Loose Tools

• Preliminary Expense

Answer 1

Preliminary Expense

Explanation:

Preliminary expenses are expenses incurred before a company is created and before any business operations begin; they are a good example of fictional assets that are written off each year from the profits earned by the business. Legal expenditures, professional fees, stamp duty, printing fees, and the company's registration fees are all examples of preliminary expenses. Preliminary expenses are recorded on the Assets side of a company's balance sheet.