Question

______________ assets are not taken into consideration under net asset method.

• A. Current assets
• B. Fixed assets
• C. Fictitious assets
• D. Tangible assets

Answer 1

The correct option is C Fictitious assets

Under net asset method, the value of all assets are added and liabilities to be deducted from the total of the assets to find out the purchase consideration.

For this calculation, fictitious assets are not to be added.

Fictitious assets are those assets which are not represented by anything concrete or tangible. There are no tangible properties behind such assets. Preliminary expenses, prepaid expenses are the examples of fictitious assets.