The unadjusted trial balance lists Supplies with a $1,078 balance. After taking an inventory of supplies, it was found that $590 were on hand. The adjustment to Supplies Expense is a:
A)$590 debit.
B)$590 credit.
C)$488 debit.
D)$488 credit.

Question

Quizplus · Accepted Answer

The adjustment to the Supplies Expense account is calculated as follows:

Beginning Balance of Supplies - Ending Balance of Supplies on hand = Supplies Expense

$1,078 - $590 = $488

Since the supplies on hand are less than the beginning balance, this represents a decrease in Supplies Expense, which is a credit to the account. Therefore, the correct answer is C) $488 debit.

The Unadjusted Trial Balance Lists Supplies with a $1,078 Balance