Recommendation Fictitious Assets In Balance Sheet

It does not have any real value as an asset and cannot be sold.

Fictitious assets in balance sheet. The Auditor should verify that un-written amount is shown in the balance sheet. What are fictitious assets. Thats why these types of expenses are treated as assets and shown in the balance sheet.

Any physical thing that has money value is. They usually include part of expense losses which are not wholly written off in the year of their incidence. Using a fictitious asset account is a legitimate way to hold these types of unattached expenditures until.

However they meet the definition of assets while the fictitious assets just the expense which not yet reclass from the balance sheet. Verification and Valuation of Fictitious Assets These expenses are shown in the balance sheet. Balance sheet is a statement of.

Fictitious assets have no physical existence or you can say these are intangible assets. The incidental expenses which cannot be classified as manufacturing selling and administrative expenses are called miscellaneous expenditure. Preliminary expenses are an example of _____ a Fixed asset b current asset c Fictitious asset d Investment.

On the balance sheet fictitious assets can be found in asset part of it eg. These type of assets are just expenses which are treated as assets. Thus fictitious assets are not an asset but just the expenses or losses which can not be accounted for in the current reporting period rather are to be written off in the future reporting period.

Hence -ve balance in Liabilities Side which can be shown on Asset Side. Pl dr balance is a fictatious asset. This inclusion unduly inflates the value of total assets.