Question

In November 2019, Yammy Fun Inc. purchased advertising for $1,000 that ran in the local November news paper. All purchases and services are made on credit. The bookkeeper, Patrick Fitz, recorded the advertising by crediting Supplies Inventory (asset) and debiting accounts payable. In 2020 (the following year), the new bookkeeper, Tua, saw this entry and asked you to help him analyze the entry. What is the correcting entry for 2020? Group of answer choices

Answer 1

Answer:

debit advertising expense for 1,000, debit supplies inventory for 1,000, and credit accounts payable for 2,000

Explanation:

The correcting entry is

Advertising expense Dr$1,000  

Supplies inventory Dr $1,000  

            To Accounts payable $2,000

(being the correct entry is recorded)

here the advertising expense and inventory is debited as it increased the expenses & assets and credited the account payable as it also increased the liabilities