[dwatkins1025]

Study Question

Early in 19X2 while bookls are still open you are informed that 19X1 Advertising expense includes 90,000 for printing catalogs for a campaign to begin in January 19X2 and that a 50,000 invoice for television commercials shown in Decemebr 19x1 was debited to 19x2 Advertising Expense. The correct entry to record as of Dec 31 19X1 is

a. a net debit to Advertising Expense of 50,000
b. a net credit to A.E of 40,000
c. a net credit to A.E. of 90,000
d. a net credit to A.E. of 140,000

I chose c because the account in dec only have 90,000 in it and you have an invoice but you do not have to record the payment until 19X2. Am I correct and if not what is the answer and how did you get it

[bhet]

I think it's a. since only the 50000 is the expired portion of the advertising exp. The rest could be classifies as a prepaid advertisements.