Question

________ is not a fictitious asset.

• A. Accumulated losses
• B. Discount on issue of shares and debentures
• C. Deferred revenue expenditure
• D. Pre-paid rent

Answer 1

The correct option is D Pre-paid rent

Fictitious assets are not assets at all however they are shown as assets in the financial statements only for the time being. In fact, they are expenses and losses which for some reason couldn't be written off during the accounting period of their incidence. Fictitious assets are written off against the firm's earnings more than one accounting period. Basically, they are amortized over a period of time. They are recorded as assets in financial statements only to be written off later. Promotional expenses, Preliminary expenses, Discount allowed on issue of shares and Loss incurred on issue of debentures are examples of fictitious assets. Prepaid rent is not a fictitious asset.