Question

Q.9. Advertisement expenses of Rs.
3,000 paid for three years, how much
will be taken into current Profit and
Loss Account?
your answer ,​

Answer 1

Answer:

Rs. 3,000 will be taken in the current P&L Account

Explanation:

Advertisement expense is a deferred revenue item.

Answer 2

Answer:

Advertisement expenses of Rs.3,000 paid for three years, then amount to be to be taken to the debit side of  Profit and loss account is Rs.1000 (Rs.3000 ÷ 3 years)

Explanation:

Any indirect expenses paid in advance is term as as prepaid expenses.

Remaining Rs.2000 is shown as prepaid expenses under current assets.

Prepaid expenses are deducted from the concerned expenses and shown under current asset.