Question

what us Fictitious assete ?​

Answer 1

Answer:

The word “fictitious” means “not true” or “fake” or "imaginary".

The assets which have no physical existance and realizable value are called Ficticious assets.

Ficticious assets are just capital expenditure which cannot be shown on PL account but is written off during one accounting period, instead it will be spread over many years.

It is generally shown in the asset side of the balance sheet, later it will be written off to the PL account by decreasing its value in the Balance Sheet.

Examples of Fictitious Assets:-

• Profit and loss account debit balance i.e. Net Loss
• Marketing expenses of a business
• Underwriting commission
• Preliminary expenses
• Discount allowed on issue of shares
• Loss incurred on issue of debentures

Hope it helps! ! !

Answer 2

what is Fictitious assete ?

Answer:

➡➡The best way to understand fictitious assets is to memorize the meaning of the word “fictitious” which means “not true” or “fake”.

➡➡Fictitious assets are not assets at all, however, they are shown as assets in the financial statements only for the time being. In fact, they are expenses & losses which for some reason couldn’t be written off during the accounting period of their incidence.

➡➡They are written off against the firm’s earnings in more than one accounting period. Basically, they are amortized over a period of time. They are recorded as assets in financial statements only to be written off in a future period.

Examples of Fictitious Assets

➡Promotional expenses of a business

➡Preliminary expenses

➡Discount allowed on issue of shares

➡Loss incurred on issue of debentures