Abe & Anna Split Ice Cream Parlour paid $1,800 cash for a 6-month advertising contract on September 30, 2013. The amount of advertising expense reported on the Income Statement for the year ending December 31, 2013, for this advertising contract is

Question

Quizplus · Accepted Answer

The advertising contract covers 6 months, from September 30, 2013, to March 31, 2014. By December 31, 2013, only 3 months have passed, so the expense for those 3 months is $1,800 / 6 months * 3 months = $900.

Abe & Anna Split Ice Cream Parlour Paid $1,800 Cash