Expenses incurred for making a video which is advt and it's not published
This query is : Resolved
10 October 2017
journal entry
10 October 2017
Prepaid Expense Dr
To Bank/vendor
24 July 2024
If you have incurred expenses for making a video advertisement that has not been published yet, you typically treat these expenses as Prepaid Advertising Expenses or as part of your Marketing Expenses. Here’s how you can record the journal entry for such expenses:
### Journal Entry for Expenses Incurred for Unpublished Video Advertisement:
1. **Identify the Expenses**: Determine the total amount of expenses incurred for making the video advertisement. This may include costs such as video production, editing, scripting, actors' fees, studio rental, etc.
2. **Accounting Treatment**:
- Since the advertisement has not been published and is still in the process of being completed or awaiting publication, these expenses are considered prepaid or accrued until the advertisement is used.
3. **Journal Entry**:
- Assuming the expenses are paid in cash:
```
Advertising Expenses A/C Dr.
To Cash/Bank A/C Cr.
```
- Debit the Advertising Expenses account to record the total expenses incurred.
- Credit the Cash or Bank account to record the payment made for these expenses.
4. **Accounting Classification**:
- **Prepaid Advertising Expenses**: If you expect to use the advertisement in the near future (typically within the same accounting period), classify the expenses as Prepaid Advertising Expenses on your balance sheet.
- **Accrued Advertising Expenses**: If the advertisement will be used in future periods, classify the expenses as Accrued Advertising Expenses until the advertisement is published.
### Example:
- Suppose you incurred Rs. 50,000 for video production and related expenses.
- Record the journal entry:
```
Advertising Expenses A/C Dr. Rs. 50,000
To Bank A/C Cr. Rs. 50,000
```
### Treatment in Financial Statements:
- **Balance Sheet**: Report Prepaid Advertising Expenses as a current asset if the advertisement will be used within one year. Report Accrued Advertising Expenses as a current liability if the advertisement will be used beyond one year.
- **Income Statement**: These expenses will not be immediately expensed on the income statement but will be recognized as expenses when the advertisement is published and utilized.
### Conclusion:
By recording the expenses for making the video advertisement that has not been published yet, you ensure accurate financial reporting and comply with accounting principles. Ensure to consult with your accountant or financial advisor for specific guidance tailored to your business and accounting policies.
### Journal Entry for Expenses Incurred for Unpublished Video Advertisement:
1. **Identify the Expenses**: Determine the total amount of expenses incurred for making the video advertisement. This may include costs such as video production, editing, scripting, actors' fees, studio rental, etc.
2. **Accounting Treatment**:
- Since the advertisement has not been published and is still in the process of being completed or awaiting publication, these expenses are considered prepaid or accrued until the advertisement is used.
3. **Journal Entry**:
- Assuming the expenses are paid in cash:
```
Advertising Expenses A/C Dr.
To Cash/Bank A/C Cr.
```
- Debit the Advertising Expenses account to record the total expenses incurred.
- Credit the Cash or Bank account to record the payment made for these expenses.
4. **Accounting Classification**:
- **Prepaid Advertising Expenses**: If you expect to use the advertisement in the near future (typically within the same accounting period), classify the expenses as Prepaid Advertising Expenses on your balance sheet.
- **Accrued Advertising Expenses**: If the advertisement will be used in future periods, classify the expenses as Accrued Advertising Expenses until the advertisement is published.
### Example:
- Suppose you incurred Rs. 50,000 for video production and related expenses.
- Record the journal entry:
```
Advertising Expenses A/C Dr. Rs. 50,000
To Bank A/C Cr. Rs. 50,000
```
### Treatment in Financial Statements:
- **Balance Sheet**: Report Prepaid Advertising Expenses as a current asset if the advertisement will be used within one year. Report Accrued Advertising Expenses as a current liability if the advertisement will be used beyond one year.
- **Income Statement**: These expenses will not be immediately expensed on the income statement but will be recognized as expenses when the advertisement is published and utilized.
### Conclusion:
By recording the expenses for making the video advertisement that has not been published yet, you ensure accurate financial reporting and comply with accounting principles. Ensure to consult with your accountant or financial advisor for specific guidance tailored to your business and accounting policies.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Should I include march foreign salary received in April in my income for FY 2023-24?
- Refund of AY 22-23
- HSN Details in IFF/GSTR-1 & in GSTR 9
- Tax on capital gains revoked us 54f
- TDR receipts for agreement holder
- Inventory of finished goods
- Sale of property furniture sale
- Filing of Form 10BB instead of Filing Form 10B
- Quiery in relation to GST liability in case of an advocate who has obtained GST registration.
- Clarification on Documentation of Paid-Up Capital Contribution by Directors
- JOB WORK ITC 04
- MODEL FILLED AUDIT REPORT FOR TRUSTS IN FORM 10B
- 115TD on cancellation of 12A 80G Registration
- Point (III) 9 of GSTR-9C
- MIS MATCH OF INVOICE NUMBER
- How to adjusted advances given or receipt
- Foreign vendor without PAN unable to to register due to non receipt of OTP on foreign number ?
- 133(6) DIN INVALID format error - ->WHERE TO REPLY 133(6) notice?
- Query for dubts
- CASE INTIMATION OF LIABILITY UNDER SECTION 73(5)(Rule 142(1A)
Trending Online Classes
CAclubindia
