Advertisement expenses Rs 30,000/- paid for 2 years from 1st Jan 2019 . calculate prepaid advertisement for the year ended on 31st March 2019
Answers
Answer:
For2019
10000/2= 5000
same for year 2020
10000/2= 5000
Explanation:
Advertisement ₹10000 for 2years is deffered expense and thus amount of it should be dreferred in useful life
Answer: For2019
30000/2= 15000
the same in 2020
30000/2= 15000
Advertisement A deferred expenditure of $30,000 for two years should be referred to in usable life.
Explanation: Deferred advertising is a current asset account that holds all advertising that has been paid for in advance but has not yet been utilized. As these expenses are incurred (for example, by running television or Internet advertisements), the relevant part of this asset is recognized as advertising expenditure. Prepared advertising is an expense that has been pre-paid. A prepayment is also known as a delayed expenditure. For example, suppose a company spends $5,000 on ads each year and pays in advance on January 1st. The first general notebook entry is a credit to Prepaid Advertising and a negative to Advertising Expense. A month's worth of ads has been expensed and is no longer reserved, as indicated by the. If you bought the ads directly, this is the only transaction that needs to be documented. Prepaid expenditures are not originally noted on an income statement. Instead, prepaid expenditures are first noted on the balance sheet, and then the benefit or expense is recognized on the income statement as the benefit or expense is realized.
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