Expenses for new established co.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

14 January 2012 We established a new co doing job of fabrication. we have done alot of expenses before establishment of the company.like legal Exp, Staff salary, stationery exp, loan payment, assets purchased etc. now how can we make entry for those above expenses. please help.

CA Prashant Gupta

CA Prashant Gupta (Expert)
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14 January 2012 These expenses can be classified as pre-operative expense and you can write off these expenses in time span of 5 years.
For accounting entry purpose, on the date when company come to existence you can debit pre-op exp and credit the persons/ promoters who has made all these payments in behalf of company and make a resolution in first meeting of the company.