Current assets

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kalyanigovindarajan

kalyanigovindarajan (Querist)
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02 November 2011 Explanation of Deferred Revenue Expenses and entries in account book

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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14 May 2012 Deferred revenue expensditure is a revenue expense incurred in the current accounting year but which is expected to give benefits in future periods also.

For instance huge expense on advertisement.

The enterprise estimates the period for which the benefit is expected to be received and spreads the total expenditure over that period.

Entries will be:

Advertisement A/c Dr (Current year share)
Deferred Advertisement A/c Dr
To Bank (Total)

Every year :

Advertisement A/c Dr
To Deferred Advertisement A/c