WHY ADVERTISEMENT EXPENDITURE IS NOT CLOSED IN REALISATION ACCOUNT

asked Aug 22, 2014 in Partnership-Dissolution of a Partnership Firm by deepz (143 points) 561 views

1 Answer

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Advertisement expenses appearing in the balance sheet is a Deferred Revenue Expenditure, hence it is written off to all partners' capital accounts in their profit sharing ratio.

Only all assets and liabilities are transferred to Realisation A/c. In case there are any Reserves or a Provisions against any asset, then they are also transferred to the Realisation Account. For example if there is Depreciation Reserve Fund against Machinery, then Machinery is transferred to debit side of Realisation A/c and Depreciation Reserve Fund will be transferred to the credit side of Realisation A/c.

answered Aug 22, 2014 by jbsclasses (3,971 points)
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