/** * The main template file * * This is the most generic template file in a WordPress theme * and one of the two required files for a theme (the other being style.css). * It is used to display a page when nothing more specific matches a query. * E.g., it puts together the home page when no home.php file exists. * * @link https://developer.wordpress.org/themes/basics/template-hierarchy/ * * @package WordPress * @subpackage Tally * @since 1.0.0 */ ?>
Advertising expense refers to cost incurred in promoting a business, such as publications in periodicals (newspapers and magazines), television, radio, the internet, billboards, fliers, and others. Since the accountants cannot measure the future benefit of the advertising, the advertising costs must be reported as Advertising Expense at the time the ads are run.
A prepayment of the cost of ads that will air in the future should be recorded in a current asset account such as Prepaid Advertising. When the ad is aired, the amount must be transferred from Prepaid Advertising to Advertising Expense.
Advertising Expense is an expense account. It is part of operating expenses in the income statement. Sometimes, companies pay for advertisements in advance to media companies. These advanced payments are treated as assets (prepaid advertising) and only become part of expense once the advertising services have been performed.
Advertising Expense |
xx.xx |
|
Cash |
|
xx.xx |
Prepaid Advertising |
xx.xx |
|
Cash |
|
xx.xx |
Advertising Expense |
xx.xx |
|
Prepaid Advertising |
|
xx.xx |
Let's assume that in April a corporation paid Rs 15,00,000 to prepare an ad and to book a time for it to be shown during the IPL match in early June. Until June, the Rs 15,00,000 is the current asset as prepaid advertising. After the ad is shown in the IPL match, the corporation must credit prepaid advertising and debit advertising expense. This is necessary because the accountants cannot measure the sales (if any) that will occur because of the IPL ad.
Learn More
Capital Lease, Life Cycle Costing, Budgeting vs. Forecasting, Royalty in Accounting, Auditing Process, External Audit
TallyPrime on AWS – The Best Cloud Accounting Software
Docker quick start guide
Try the Best e-Invoicing Software for Free
Connected e-Invoice Software Vs Other e-Invoicing Tools – Which is better?
Try the Best e-Invoicing Software for Free
Got Multi-GSTIN? How TallyPrime Can Help You Manage Multi-GSTIN In A Single Company?