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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

The Supplies account has a $1,400 balance. A physical inventory is taken at the end of the fiscal year, and the amount on hand is determined to be $300. What adjusting entry is required to record the supplies used?

  1. a. Supplies 300 DR, Cash 300 CR
  2. b. Supplies Expense 1,400 DR, Supplies 1,400 CR
  3. c. Supplies 1,100 DR, Supplies Expense 1,100 CR
  4. d. Supplies Expense 1,100 DR, Supplies 1,100 CR
  5. e. None of the above

To determine

Identify the adjusting entry to record the supplies used.

Explanation

Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and stockholders’ equity) to maintain the records according to accrual basis principle.

Record the adjusting entry for the supplies used.

Date Account Title and explanation

Debit

($)

Credit ($)
  Supplies expense(Working Note) 1,100  
  Supplies   1,100
  (To record the supplies used )    

Table (1)

  • Supplies expense appears in income statement and it is increased...

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