b reversing two digits c omitting an account balance d showi

b. reversing two digits c. omitting an account balance d. showing a debit balance as a credit or a credit balance as a debit almount 9. Early in 20X2, while the 20X1 books are still open, you are informed that 20X1 Advertising Expense includes $90,000 for printing catalogs for a campaign to begin in January, 20X2 and that a $50,000 invoice for televi- sion commercials shown in December, 20X1 was debited to 20X2 Adver- tising Expense. iS. The correcting entry to record as of December 31, 20xI is a. a net debit to Advertising Expense of $50,000 b. a net credit to Advertising Expense of $40,000 c. a net credit to Advertising Expense of $90,000 d. a net credit to Advertising Expense of $140,000 Ad

Solution

1. For the 90000, we should have deducted that from the total expenses account reported in the period, that we did not do, and

2. For 50000 we would include that in the period end expense, so should have made no adjustment for this, but we deducted this.

So, we had to reduce 90000 but include 50000, so we have inclluded a 40000 excess that is to be reversed. And Expense account has a normal Debit so we would reducre it by a Credit to the account by 40000.

So its b) a net credit to the advertising expense of $ 40,000