In other words, fictitious means fake or not real, these are not assets at all but they show in financial statements . Expenses incurred in starting a business, goodwill, patents, trademarks, copy rights comes under expenses which cannot be placed any headings. Fictitious assets have no physical existence.
Which is not a fictitious asset?
Among the given options Discount on issues of shares and debentures is not the example of fictitious assets.
Why goodwill is not a fictitious asset?
Goodwill is an intangible asset because it have not any physical firm and we can’t see and touched it . we can’t share them physically it’s means by touch but we can pay this asset . we can used it (Goodwill) so this is not fictitious asset.
Is fictitious asset is a fixed asset?
The major difference in both terms is on the basis of the nature of Expenditure and receiving benefits from them. From the Fixed assets, we will receive a benefit for a long period i.e. more than one year but from fictitious assets, we had already received the benefits but we will amortize them from the future profits.
Which of the following is an example of fictitious assets?
Major examples of fictitious asset are : profit and loss (dr. bal) , discount on issue of shares and debentures, preliminary expenses, underwriting commission, advertisement suspense a/c etc.
Is goodwill is not a fictitious asset?
Goodwill is an intangible asset because it have not any physical firm and we can’t see and touched it . we can’t share them physically it’s means by touch but we can pay this asset . we can used it (Goodwill) so this is not fictitious asset.
What is a fictitious asset?
Fictitious assets are the assets which has no tangible existence, but are represented as actual cash expenditure . ... Expenses incurred in starting a business, goodwill, patents, trademarks, copy rights comes under expenses which cannot be placed any headings.
Is the example of fictitious asset?
Fictitious assets are the deffered revenue expenditure as well as intangible assets i.e advertisement expenses, discount on issue of shares and debentures. But point to be remembered that Goodwill, Patents, Trade Marks are not the part of Fictitious assets.
What is the treatment of fictitious assets?
Fictitious assets have no physical existence or you can say these are intangible assets. These type of assets are just expenses which are treated as assets. They have no realizable value. They are amortized or written off in one then more profitable financial year .
How will verify the fictitious assets?
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 expenses & losses which for some reason are not written off during the accounting period of their incidence.
Is bills receivable a fictitious asset?
Answer: 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 and losses which for some reason couldn’t be written off during the accounting period of their incidence. ... Prepaid rent is not a fictitious asset.
Is advertisement suspense a fictitious asset?
This capitalized Advertisement Expenditure is called Deferred Advertisement Expenditure or ‘Advertisement Suspense Account’ . ... Such Deferred Revenue Expenditure is shown in the Balance Sheet as an asset till it is written off to Profit & Loss A/c. Reason for this is very simple.
Is deferred tax asset a fictitious asset?
A deferred tax asset, however, has no physical form to take. It’s not a pile of money, nor can it be turned into one. It’s essentially a “credit” — an accounting device that lets you lower your future reported expenses. As such, it is an intangible asset .
Is goodwill a fictitious asset explain?
Goodwill is considered as an intangible asset of the firm . It does not have any physical existence. ... On the other hand, fictitious assets are neither tangible nor intangible assets. They are the expenses or losses which are still to be charged (debited) from the profit.
What is the difference between intangible asset and fictitious asset?
Intangible assets are assets that do not have physical substance and we cannot see or touch. However, they meet the definition of assets while the fictitious assets just the expense which not yet reclass from the balance sheet.
Is goodwill a real asset?
1 Goodwill is considered an intangible (or non-current) asset because it is not a physical asset like buildings or equipment.
