On February 1, Potter Company paid £900 for advertisements to run during the month of February. This transaction will

Question

Quizplus · Accepted Answer

The payment of £900 for advertisements is an expense for the company and will decrease the cash balance. Therefore, option A is the correct answer. Option B is incorrect because advertising expenses are not recorded in accounts payable. Option C is incorrect because the payment of £900 will decrease accounts payable, not increase it. Option D is incorrect because the payment of £900 for advertisements is an expense for the company and will reduce the advertising expense balance.

On February 1, Potter Company Paid £900 for Advertisements to Run