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WAEC Financial Accounting 1993 Question 39

Question 39

Final Accounts of a Sole Trader

Which of the following is a fictitious asset?

  1. A.Plant and Machinery
  2. B.Prepayment
  3. C.Preliminary Expenses
  4. D.Investment
  5. E.Fixtures and fittings.
Show the answer and explanation

Answer: C (Preliminary Expenses)

Explanation

Preliminary expenses are shown as an asset only until written off; they have no real value.