How do I reverse a prepaid advertising entry that was a barter from a merch sale but the include in no way ran?
Problem by Marie Jehanne: How do I reverse a prepaid advertising entry that was a barter towards a merch sale but the include never ran?
In this situation, a organization offered merchandise in exchange for advertising (a barter agreement). The products was sold, and the A/R was reversed to prepaid advertising as the advert was to be operate at a potential date. The seller has now defaulted, and I desire to write off the prepaid ad. To which account really should I create it off against?
Reply by mindcrime828
As the barter arrangement was terminated because of to non-compliance, the amount for the prepaid advertising would in essence turn out to be an accounts receivable. Therefore if the quantity has been deemed uncollectable, then you would compose it off to poor debt expenditure.
What do you assume? Solution beneath!