Which of the following does not correctly describe an adjusting journal entry that debits supplies expense and credits supplies?

Question

Quizplus · Accepted Answer

Option C does not correctly describe an adjusting journal entry that debits supplies expense and credits supplies. This entry increases expenses and decreases assets (Option A), decreases net income and decreases assets (Option B), and decreases net income and decreases stockholders' equity (Option D). However, it does not increase retained earnings as the supplies purchased were used up or consumed during the period, meaning they do not contribute to the company's earnings or income.

Which of the Following Does Not Correctly Describe an Adjusting