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Accounting Terms — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountAccounting Terms3 Marks
Question
Explain the following term:
Fictitious Assets.
✓

Answer

Asset created by an accounting entry (and included under assets in the balance sheet) 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 (such as those incurred in starting a business) that cannot be placed under any normal account heading. Fictitious assets are written off as soon as possible against the firm's earnings.

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