Advertising Expense Journal Entry

Advertising Expenses are incurred to promote the products, Brand’s Names and other marketing purposes. It is an Indirect Expense for the advertiser company which is paid to the advertising company who places the ads, banners, etc of advertiser company in order to promote the business of advertiser.

For Example, ABC is an Advertiser company who starts a campaign with advertising company XYZ to promote its offers through ads. The advertiser company paid Rs. 20000 for broadcasting the ads for 15 days, then it is an Expense for the advertiser and a Revenue for advertising company as a fees. From the point view of Advertiser’s business, the following Journal Entry is recorded in its Books of Accounts as shown below:

                                   Advertising Expense Account   20000

                                                                                  Cash Account  20000

(Paid Advertisements For Cash)

Advertising or Advertisement Expense is closed to the Income Statement as an Administrative Expense.