The adjusting entry for the expiration of prepaid advertising,originally recorded as an asset,
A)Advertising Expense - Debit;Prepaid Advertising - Credit
B)Prepaid Advertising - Debit;Cash - Credit
C)Advertising Expense - Debit;Cash - Credit
D)Prepaid Advertising - Debit;Advertising Expense - Credit

Question

Quizplus · Accepted Answer

The adjusting entry for the expiration of prepaid advertising would involve recognizing the expired portion of the asset as an expense. This can be done by debiting Advertising Expense (to increase expense) and crediting Prepaid Advertising (to decrease the asset). Therefore, option A is the correct choice. Option B is incorrect because it assumes a cash transaction, which may not be the case. Option C is incorrect because it does not address the need to reduce the Prepaid Advertising asset. Option D is incorrect because it credits Advertising Expense, which would reduce the expense account (opposite of what is needed).

The Adjusting Entry for the Expiration of Prepaid Advertising,originally Recorded