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    Corptheater's Avatar
    Corptheater Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Oct 15, 2009, 12:24 PM
    Debit Prepaid Advertising and credit.
    I am going nuts!
    Here is the problem.

    Advertising paid in advance $700

    Does this mean I debit Prepaid Advertising and Credit Cash?
    morgaine300's Avatar
    morgaine300 Posts: 6,561, Reputation: 276
    Uber Member
    		  
    #2

    Oct 16, 2009, 08:36 PM

    Yup. :-) Something you pay "in advance" is a prepaid, a deferred expense. It's an asset because you still have something coming to you that you've paid for, but not yet gotten. (In this case, someone "owes" you advertising work.) It'll stay there until the advertising is provided to you. And if you paid it, it's cash.
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