The correct answer is d E. None of the above 3o00 per nath that on October 30th

Question

The correct answer is d E. None of the above 3o00 per nath that on October 30th Bryan and Abigail paid the local radio station s3.000 representing payment Assume in full for three months of advertising spots which began running on August 1st. Assume that they prepare proper accrual basis financial statements on a monthly basis as such any necessary adjusting ve been made. The entry on October 30th would include: A. a debit to advertising expense for $3,000 B. a debit to pre-paid advertising expense for $3,000 C. a credit to accounts payable for $1,000 D. a credit to cash for $3,000 E. None of the above would be included as part of the entry

Explanation / Answer

The expense is for the period August to October (three months). Since the basis of accounting being used is accrual basis, cash entries is recorded when cash is paid but expenses is recorded as when incurred. In the given cash on 30th October , cash payment is done and cash is going out of business thus according to golden rules of accounting, Credit cash with amount $3,000.

Answer D. a credit to cash for $3,000.

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