Final accounts

Lucyjane98

What does advertising due go into , current assets or current liabilities , and why? Please (junior cert business )

smcgiff

Lucyjane98 wrote: »

What does advertising due go into , current assets or current liabilities , and why? Please (junior cert business )

Mmm. Advertising is either a cost (to most businesses) such as an accountancy practice. It could also be Revenue for a media company.

I'm not quite sure of what you are asking.

If you have incurred an expense for advertising, but do not yet have the invoice you would...

Debit/charge the P&L/Income statement with the cost, and book (credit) the corresponding double entry to current liabilities (an accrual).

Why?

You need to record the cost the company has incurred. You do this by charging the P&L. You also need to record the corresponding liability (debt owed).

Eventually you will get an invoice, which you will post to the supplier account which will take the place/cancel out the current liability accrual.

* I really hope I've not confused you further. Post the question up in full if you like.

gaeilgeor

Lucyjane98 wrote: »

What does advertising due go into , current assets or current liabilities , and why? Please (junior cert business )

It is a current liability because advertising costs the business money. Current liabilities always costs a business money . Avertising due is money still due to be paid so it is a cost for the business