During the month of August, Our Town Hardware Store advertised an end-of-the-year sale in the local newspaper. Our Town Hardware Store received the bill for $60 in August, but waited until September to pay the advertising expense. The journal entry to record the bill in August is
A) Advertising Expense 60 Accounts Receivable 60
B) Advertising Expense 60 Accounts Payable 60
C) Accounts Payable 60 Advertising Expense 60
D) No entry is made in August.

Question

Quizplus · Accepted Answer

The journal entry to record the bill in August should be Advertising Expense 60 Accounts Payable 60, because the store received the bill but did not make the payment in August. Therefore, it should be recorded as an account payable.

During the Month of August, Our Town Hardware Store Advertised