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Write short notes :Deferred Revenue Expense |
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Answer» Many times, huge amounts of revenue expenses are incurred and the benefit of which is received by the concern for a long period of time. This expense is treated as a revenue expense and is written off by allocating the same proportionately over a number of years in which, the benefit is likely to be received. Such types of expenses are known as Deferred Revenue Expenses. The portion which is not written off is shown in the Balance Sheet on the Assets side, which is known as fictitious asset. Illustrations: Preliminary expenses, Expenses on issue of shares or debentures, Repairing expenses on large scale, underwriting commission, etc. are included in the Deferred Revenue expense. |
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