Fictitious Assets

Fictitious assets are assets that do not have a physical existence but are recorded as assets on a company's balance sheet. These assets are not tangible or measurable, and their value cannot be realized or converted into cash. They are usually created as a result of accounting practices or transactions and are not considered real or tangible assets.

Examples of Fictitious Assets

There are several examples of fictitious assets that can be found on a company's balance sheet. One such example is advertising suspense.

Advertising Suspense

Advertising suspense is a fictitious asset that arises when a company incurs advertising expenses but has not yet received the benefits or services associated with those expenses. It represents the prepayment made by the company for advertising services that have not been utilized or received.

When a company pays for advertising expenses in advance, it records the payment as a prepaid expense or advertising suspense. This amount is then gradually allocated to the income statement over the period in which the advertising services are utilized or received by the company.

Explanation of the Answer

In the given options, the only example of a fictitious asset is "Advertising Suspense" (option C). The other options are not fictitious assets because they have a physical existence and can be measured or converted into cash.

- Building (option A): A building is a tangible asset that has a physical existence and can be measured and valued. It is not a fictitious asset.
- Bill receivable (option B): A bill receivable is a financial instrument that represents the amount owed to a company by its debtors. It is a real and measurable asset.
- Cash (option D): Cash is a tangible asset that can be measured and converted into other assets or used for transactions. It is not a fictitious asset.

Therefore, the correct answer is option C - Advertising suspense, as it is the only example of a fictitious asset among the given options.