Concept:Preliminary expenses are costs incurred when setting up a company, such as legal and registration fees.
They are classified as fictitious assets because they have no physical existence and cannot be sold.
Explanation:Preliminary expenses are written off over a few years from profits.
They are not tangible, liquid, or wasting assets.
Tangible assets have physical form, liquid assets are cash or near-cash, and wasting assets lose value through use or extraction.
Fictitious assets are not real assets; they are simply debit balances shown on the balance sheet until fully written off.
Therefore, preliminary expenses are best described as fictitious assets.
Answer:A. fictitious assets