On September 30,ABC Co.received a bill for $1,000 for running a newspaper ad in September.The bill will be paid in October.Which of the following statements is correct for September?
A) Liabilities are decreased by $1,000.
B) Assets are increased by $1,000.
C) Expenses are increased by $1,000.
D) Revenues are decreased by $1,000.

Question

Quizplus · Accepted Answer

The company incurred an expense in September by running the newspaper ad, so expenses are increased by $1,000. The liability to pay for the expense is not yet recorded in September as it will be paid in October. There is no increase in assets or decrease in revenues in September.