How to Record Advertising Payment in Accounting

What is the journal entry to record a payment for advertising in accounting?

The correct journal entry to record a payment for advertising in accounting is: Debit Advertising Expense, $375; Credit Cash, $375.

Journal Entry for Advertising Payment

Recording advertising expenses in accounting is essential for maintaining accurate financial records. When a business pays cash for advertising, it incurs an expense that needs to be properly recorded in the books. The journal entry for this transaction involves debiting the advertising expense account and crediting the cash account.

Debiting the Advertising Expense account increases the total expenses incurred by the business for advertising purposes. On the other hand, crediting the Cash account reduces the available cash balance of the business due to the outgoing payment for advertising services.

Explanation:

Fred's Furniture Store's transaction of paying cash for advertising should be recorded in the accounting books as follows:

Debit Advertising Expense, $375

Credit Cash, $375

This journal entry accurately captures the decrease in cash and the corresponding expense for advertising services. When recording an expense in accounting, the expense account is always debited because expenses increase with a debit and decrease with a credit. Similarly, the cash account is credited when cash is spent because assets decrease with a credit and increase with a debit according to accounting principles.