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Accounting entries for priliminary/pre-operative expenses

M.Chandrasekharan (Chief Accountant) (68 Points)

24 June 2013

Hi All,

Greetings.

What is the accounting entries for the capitalisation of Assets and Expenses of Priliminery/Pre-operative expenses. Please send me the message immediately.

Thanks & Regards

M.Chandrasekharan

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Giridhar S Karandikar (Team Lead) (7543 Points)
Replied 24 June 2013

For Capitalization of Assets entries will be as follows: Assset A/c Dr xxxx To- bank xxx If purchase on credit entry will be: Asset A/c Dr xxxx To- Supplier xxxx If taken on loan Asset A/C dr xxxx To- Bank xxx To-bank Loan xxx for preliminay/pre-operative expenses incurred : Preliminay Expenses Dr xxxx to-Bank xxxx If the entity is a company then these shud be shown under Other current Assets. If a firm/sole proprietor it shud be shown under Miscellaneous Expnditure.