1.) I am preparing accounts of proprietary firm . There is capital shown as Rs 50,000
and first year loss is more than capital . Then how should I transfer net loss to his capital accounts.
2.) If preliminary expenses show in balance sheet then loss reduced but more than capital Rs 5000
Is it necessary to show preliminary expenses
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treatment of net loss in first year
Replies (5)
Yes preliminary expenses needs to be shown as Other current liability and written off in 5 years if all conditions fulfilled as per section 35D
and yes you have to transfer loss to capital even if its more than capital and write off loss in future years as per specified
preliminary expenses should be under Mics expense not written off on the Asset side not as current liability It is not liability to payas we have alrady paid & should written off in 5 Years . please confirm
Preliminary expenses will be written off as per section 35D.
Yes it will be under Miscellaneous expense in other current liability
is it compulsory to get books of accounts to be audited from CA to claim preliminary expenses?
| Originally posted by : Ravindra Mahale | ||
 |
is it compulsory to get books of accounts to be audited from CA to claim preliminary expenses? |  |
No.
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