The cost of office supplies to be used in future periods is ordinarily shown on the balance sheet as a(n)
A) stockholders' equity
B) asset
C) contra asset
D) liability

Question

Quizplus · Accepted Answer

The cost of office supplies to be used in future periods is considered an asset because it represents economic resources controlled by the entity, which are expected to provide future financial benefits. It is recorded on the balance sheet as a current asset until it is used. It cannot be a liability since it does not represent an obligation to pay out cash or other resources in the future. It is also not a contra asset since it is not an offset to a related asset account.

The Cost of Office Supplies to Be Used in Future