Final answer:
To record the payment of an advertising bill, an accountant would debit the Advertising Expense to show the incurrence of cost, and credit Cash or Accounts Payable depending on whether the payment is made immediately or was previously recorded as a liability.
Step-by-step explanation:
The accounting transaction to record the payment of an advertising bill would typically involve two entries: a debit to the Advertising Expense account and a credit to Cash or Accounts Payable depending on the nature of the payment. If the payment is made immediately in cash, a debit to Cash would be recorded. However, if the bill had been previously recorded as a liability, the correct entry would be a credit to Accounts Payable.
When you make a payment on an outstanding bill, you are settling a liability your business has, which reduces your Accounts Payable. At the same time, this payment is an outflow of cash, so your cash balance, an asset, decreases. The Advertising Expense accounts for the cost of the advertising services that were incurred by the business.