Question
During the current accounting period, Mulholland Company paid $1,000 for advertising services in advance of receiving them. Prepaid Advertising was increased and Cash was decreased
During the current accounting period, Mulholland Company paid $1,000 for advertising services in advance of receiving them. Prepaid Advertising was increased and Cash was decreased for $1,000. At the end of the accounting period, three-fourths of the services paid for had been received.
The proper adjusting entry is:
Select one:
a.
| BALANCE SHEET | INCOME STATEMENT | ||||||
|---|---|---|---|---|---|---|---|
| ASSETS | = | LIABILITIES | + | STOCKHOLDER'S EQUITY | REVENUE | - | EXPENSE |
| Prepaid Advertising | Advertising Expense | ||||||
| +250 | +250 | -250 |
b.
| BALANCE SHEET | INCOME STATEMENT | ||||||
|---|---|---|---|---|---|---|---|
| ASSETS | = | LIABILITIES | + | STOCKHOLDER'S EQUITY | REVENUE | - | EXPENSE |
| Prepaid Advertising | Advertising Expense | ||||||
| +750 | +750 | -750 |
c.
| BALANCE SHEET | INCOME STATEMENT | ||||||
|---|---|---|---|---|---|---|---|
| ASSETS | = | LIABILITIES | + | STOCKHOLDER'S EQUITY | REVENUE | - | EXPENSE |
| Prepaid Advertising | Advertising Expense | ||||||
| -250 | -250 | +250 |
d.
| BALANCE SHEET | INCOME STATEMENT | ||||||
|---|---|---|---|---|---|---|---|
| ASSETS | = | LIABILITIES | + | STOCKHOLDER'S EQUITY | REVENUE | - | EXPENSE |
| Prepaid Advertising | Advertising Expense | ||||||
| -750 | -750 | +750 |
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Intermediate Accounting Volume 2
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Irene M. Wiecek, Bruce J. McConomy
13th Canadian Edition
1119740444, 9781119740445
