Your company bought a 30-second advertisement that aired during the Super Bowl 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? Answer
| It increases both assets and liabilities by $1.2 million. | ||
| It increases assets and decreases stockholders' equity by $1.2 million each. | ||
| It does not affect the balance sheet. | ||
| It increases liabilities and decreases stockholders' equity by $1.2 million each. |
