Question

Which of the following expenses related only to the post incorporation period

Answer 1

Explanation:

Expenses excluding for Post-incorporation periods are: viz. Directors' Fees, Debenture Interest, Preliminary Expenses, Provision for Taxation, Proposed Dividend, etc. (e) Expenses excluding for Pre-incorporation period, are: Interest on Partners' Capital, Partners' Salaries, etc.

Answer 2

Director's fees, managing director's pay, debenture interest are charged during the post-incorporation period.

Explanation:

• Director's fees, managing director's pay, debenture interest, discount on issue of debenture, discount on issue of shares,
• and other expenditures that are unique to the post-incorporation period must be charged to the post-incorporation period.

• Interest on Partners' Capital, Partners' Salaries, and other expenses not included in the Pre-incorporation period.
• The post-incorporation profit might be considered goodwill and contributed to the goodwill account.
• It can also be written off against earnings over a period of years as a deferred revenue expense.
• It could be deducted from a separate account called Loss Prior to Incorporation.