Question

susan’s company placed an ad in the loca paper for the current month to he paid next month, $2500. step-through method

which 2 accoumts are affected, what kind of accounts are they, does the account balance increase or decrease for each one and do i debit or credit the account

Answer 1

Ans:

company placed an ad in the loca paper for the current month to he paid next month, $2500. step-through method

Advertisig Expenses is an Expense account with debit balance when ad is placed in the paper ,Company is liable to pay ,So  there is increase in expenditure account called advertising Expense Account by debiting the Adveriting Expense

Ad is Placed on credit basis which is payable in Next month so liability account is effected as company owes to others

Accounts payable is a liability account with credit balance and need to be credited which result in increase in the liability Balance so Credited with(i.e to pay to others) amount to be payable