Which of the following is not a deferred revenue expenditure?
APreoperative expenses
BHeavy advertising expenses to introduce a new product
CLegal expenses incurred in defending a suit for breach of contract to supply goods
DExpenses in connection with issue of equity shares
Correct answer
C. Legal expenses incurred in defending a suit for breach of contract to supply goods
Explanation
D. Deferred revenue expenditure is a revenue expenditure whose benefit lasts for more than one accounting periods and is therefore written off during the periods over which the benefit lasts(However, AS 26 requires that Deferred revenue expenditure is expenses wholly in the year of incurrence). Legal expenses incurred in defending a suit for breach of contract for supply of goods does not satisfy the prerequisites of a deferred revenue expenditure.