SOLUTION
When preliminary expenses are written off, they are debited to profit &. Loss account. But the writing off of preliminary expenses does not involve cash payment. Hence, they are added back to net profit for calculating the operating profit.
SOLUTION
When preliminary expenses are written off, they are debited to profit &. Loss account. But the writing off of preliminary expenses does not involve cash payment. Hence, they are added back to net profit for calculating the operating profit.