At March 1, I.Repo Inc.reported a balance in Supplies of $200.During March, the company purchased supplies for $950 and consumed supplies of $800.If no adjusting entry is made for supplies:
A)stockholders' equity will be overstated by $800.
B)expenses will be understated by $950.
C)assets will be understated by $350.
D)net income will be understated by $800.

Question

Quizplus · Accepted Answer

If no adjusting entry is made, the consumed supplies of $800 will not be recorded as an expense, leading to an overstatement of stockholders' equity by $800.