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Question
The journal entry for transfer of fictitious assets, if any, is debited to _________ A/c and credited to __________ A/c.
The journal entry for transfer of fictitious assets, if any, is debited to _________ A/c and credited to __________ A/c.
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Solution
The correct option is D Partner's Capital (Individually), Fictitious Asset
Asset created by an accounting entry that has no tangible existence or realizable value but represents actual cash expenditure. The purpose of creating a fictitious asset is to account for expenses that cannot be placed under any normal account heading. They are written off as soon as possible against the firm's earnings. Partner's Capital (Individually) A/c is debited and Bank A/c is credited for transfer of fictitious assets, if any, to partner's capital accounts in their profit sharing ratio.
Asset created by an accounting entry that has no tangible existence or realizable value but represents actual cash expenditure. The purpose of creating a fictitious asset is to account for expenses that cannot be placed under any normal account heading. They are written off as soon as possible against the firm's earnings. Partner's Capital (Individually) A/c is debited and Bank A/c is credited for transfer of fictitious assets, if any, to partner's capital accounts in their profit sharing ratio.
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