NABTEB Accounting 2020 Objective — Question 35

Question 35 of 50 from the National Business and Technical Examinations Board (NABTEB) Accounting 2020 Objective paper, with the correct answer and a full explanation.

An item that would be classified as preliminary expenses in a company's account is

A. formation expensesCorrect
B. general expenses
C. administrative expenses
D. distribution expenses

Explanation

Preliminary expenses are those relating to the initial, introductory and preparatory setting up of a company (formation expenses).

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