Which of the following is/are deferred revenue expenditures?

Heavy expenditure incurred on advertising a new product.

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Preliminary expenses incurred in setting up a joint stock company.

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Both (A) & (B)

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Neither (A) nor (B)

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Solution

The correct option is B Both (A) & (B)
Amount spent on advertising give benefit in future accounting periods. It increase sale for many years. Preliminary expenses for setting up joint stock company also give benefit for many years. Company once formed continue for many years. So both are deferred revenue expenditure.

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