Advertising expense in accounting refers to the costs incurred by a business for promoting its products, services, or brand to the public. These expenses are a type of operating expense and are reported on the income statement. They can include a variety of costs such as:

  1. Media Costs: Payments for advertising space or time in various media platforms, such as TV, radio, newspapers, magazines, online ads, and social media.
  2. Production Costs: Expenses related to creating advertisements, including design, printing, video production, and copywriting.
  3. Agency Fees: Payments made to advertising agencies for campaign planning, management, and execution.
  4. Promotional Costs: Costs for promotional activities, such as contests, giveaways, and events.
  5. Direct Mail: Expenses for creating and sending out marketing materials directly to potential customers via mail.
  6. Sponsorships and Endorsements: Payments made to sponsor events or get endorsements from celebrities or influencers.

In accounting, these expenses are recorded as they are incurred, following the matching principle which ensures that expenses are matched with the revenues they help to generate. Advertising expenses are typically categorized under selling expenses and deducted from the revenue to calculate the net income of the business.