Which of the following is an example of a fictitious

Solution

Fictitious assets are not real assets but expenditures that are shown as assets in the balance sheet for the time being to be written off over time. They represent deferred revenue expenditures that have already been paid but whose benefit is expected to accrue over multiple years. Preliminary expenses are a classic example of fictitious assets incurred before incorporation and gradually amortized. Other examples are discount on issue of shares, or heavy advertising expenditure or other deferred revenue expenditures, promotional expenses, etc.    Note: ·        Goodwill is intangible asset. Unlike fictitious assets, Goodwill has realisable value (it can be sold as part of the business) and represents the reputation and excess earning power of a firm ·        Deferred Tax Asset is a Real Asset representing taxes paid or carried forward that will be used to offset future tax liabilities. It has a specific economic benefit. ·        Building is a Tangible Fixed Asset with physical substance and a specific market value. ·        Debtors are Current Assets representing legal claims to receive cash from customers in the short term.