internal reconstruction

A/c entries 1240 views 4 replies

in the chap internal reconstruction-even if its not mentioned in the problem are we supposed to write off all fictitious a/cs given in balance sheet?

P/L account, patents etc...

Replies (4)

YESS... EVEN IF ITS  NOT MENTIONED IN THE PROBLEM THEN ALSO  ALL FICTITIOUS ASSETS/LOSSES  SHOULD BE WRITE OFF AGAINST CAPITAL REDUCTION A/C. ( its Hidden entry).

 

thanks..

ur welcome

Internal reconstruction is sought to improve the internal health of the company. So whenever internal reconstrution is carried out, every fictitious asset is to be removed from the balance sheet. even the goodwill amount is also to be removed, than what to talk of the dr. balances of P/L and other deferred revenue expenditure.

 

So always assume in the question while attempting, it seeks to accumulate so much of reconstruction reserve to write off all the Dr. balance of P/L, goodwill, deferred revenue exp. and other similar fictitious assets.!!!!!!!!!!!!!!!


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