What is the normal balance of Advertisement Suspense Expenditure?

Correct answer: Debit balance

The direct answer is Option A: Debit balance. Advertisement Suspense Expenditure is an expense or deferred expense item. Expenses are recorded on the debit side, so this account normally has a debit balance until it is written off. At admission, the unadjusted amount relates to the period before the new partner joined. Therefore it is written off among the old partners, usually in their old profit-sharing ratio, by debiting their capital or current accounts and crediting Advertisement Suspense Expenditure. Option A is correct because the account represents expenditure. Option B is wrong because credit balances normally represent income, capital, reserves, or liabilities. Option C is wrong because this is not a reserve balance. Option D is wrong because the item is not a liability payable to outsiders. A helpful cue is: suspense expenditure is a past cost, so think debit first and write it off before admission.