Question

Preliminary expenses written off should be
charged to??​

Answer 1

Answer:

The correct answer to this question is the preliminary expenses as 1/5th of the 5% of the capital employed for computing taxable income.

Explanation:

Given - Preliminary expenses.

To Find - Preliminary expenses written off should be charged to?

The assessee shall add the preliminary expenditure written off in the balance sheet prepared in accordance with the rules of The Companies Act 2013 and deduct the preliminary expenses as 1/5th of the 5% of the capital employed for computing taxable income.

Preliminary expenditures are those that are incurred prior to the business's formation and start-up. These are classified as revenue expenditures that have been delayed. Expenses for forming a firm, designing a logo, and so on are examples.

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