Your Company Bought a 30-Second Advertisement That Aired During the Stanley

question 121

Multiple Choice

Your company bought a 30-second advertisement that aired during the Stanley Cup finals at a cost of $1.2 million.It is legally obligated to pay for the ad but has not yet done so.How does the purchase and use of the ad time affect your company's balance sheet?

• A)It increases both assets and liabilities by $1.2 million.
• B)It increases assets and decreases Shareholders' equity by $1.2 million each.
• C)It does not affect the balance sheet.
• D)It increases liabilities and decreases Shareholders' equity by $1.2 million each.

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Definitions:

Bowman's Capsule

A cup-shaped structure in the kidney's nephrons, forming the beginning of the tubular component, which encloses the glomerulus and is involved in the filtration of blood.

Glomerulus

A network of capillaries located in the kidney, playing a key role in the filtration of blood to form urine.

Capillary

The smallest blood vessels in the body, involved in the exchange of oxygen, nutrients, and waste materials between the blood and tissues.

Hilum

Indented surface on many organs, serving as a point where nerves and vessels enter or leave.