Prepaid advertising, representing payment for the next quarter, would be reported on the balance sheet as
A) an asset
B) a liability
C) a contra asset
D) owner's equity

Question

Quizplus · Accepted Answer

Prepaid advertising represents a future economic benefit for the company, as it has already paid for advertising that will be used in the next quarter. Therefore, it is classified as an asset on the balance sheet.

Prepaid Advertising, Representing Payment for the Next Quarter, Would Be