Question

Answer in one sentence only.
What is deferred revenue expenditure?

Answer 1

Those expenses, the benefits of which accrue to an organisation for more than one accounting year are known as deferred revenue expenditure. For example, in case of advertisement expenses, the benefits of advertisement accrue to an organisation for more than one year. Hence, such expenses are spread over the years in which the benefits accrue to the organisation. The current year expenses are debited to Income and Expenditure Account and the balance is shown under Assets side of the Balance Sheet.