A company received a bill for newspaper advertising services, $350. The bill will be paid in 10 days. How would the transaction be recorded today?

a. Debit accounts payable $350, credit cash $350

b. Debit advertising expense $350, credit cash $350

c. Debit accounts payable $350, credit advertising expense $350

d. Debit advertising expense $350, credit accounts payable $350

d. Debit advertising expense $350, credit accounts payable $350

Explanation:

The advertising expense should be recognized when the economic event occurs, in this case recibing the bill, independently of its payment. This is done with a debit because expenses increase by debits. The credit account is a liability: account payable, which represents an increased on liabilities.