Incurring an expense for advertising on account would be recorded by:
A) Debiting liabilities.
B) Crediting assets.
C) Debiting an expense.
D) Debiting assets.

Question

Quizplus · Accepted Answer

Incurring an expense for advertising means that a cost was incurred in order to promote the business. Therefore, the expense should be debited to recognize the cost. Choice A is incorrect because there is no liability created by incurring an expense; a liability would be created if the expense was purchased on credit. Choice B is incorrect because advertising is not an asset, but rather an expense. Choice D is incorrect because while advertising may lead to increased sales and therefore increased assets, the initial cost should still be recognized as an expense.

Incurring an Expense for Advertising on Account Would Be Recorded