The adjusting entry necessary to record the supplies expense would result in a:
A) $700 increase in assets and liabilities.
B) $700 decrease in assets and equity.
C) $475 decrease in assets and equity.
D) $475 increase in assets and liabilities.

Question

Quizplus · Accepted Answer

The adjusting entry for supplies expense would increase the expense account and decrease the supplies asset account. Since the supplies purchased were $700 and only $225 remained at the end of the period, the amount used would be $475. This would result in a decrease of $475 in assets (supplies) and a decrease of $475 in equity (expenses). Therefore, the correct answer is C.

The Adjusting Entry Necessary to Record the Supplies Expense Would