Expenses!
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
27 July 2010
Dear all
Suppose if a company incurred an expenses say for Rs. 90,000/- for an marketing activity under this activity company collects the data from the market by paying 90,000/- to the promoters (data collectors) in the m/o march'08.....but they will get the results/benefits/business from these data from april,08 onwards..........and company is showing all the exp. of Rs. 90k as prepaid exp. in that F.Y 2008-09 and reversed the whole entry on 1st APril, 2008.
Please answer y the co. is showing this as prepaid exp???
Thanks!
Suppose if a company incurred an expenses say for Rs. 90,000/- for an marketing activity under this activity company collects the data from the market by paying 90,000/- to the promoters (data collectors) in the m/o march'08.....but they will get the results/benefits/business from these data from april,08 onwards..........and company is showing all the exp. of Rs. 90k as prepaid exp. in that F.Y 2008-09 and reversed the whole entry on 1st APril, 2008.
Please answer y the co. is showing this as prepaid exp???
Thanks!
CMA Ramesh Krishnan
(Expert)
27 July 2010
It can be treated as Deffered revenue expenses and charge off over the period of benefits received
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