A total of $4,000 in supplies was purchased during the year.By the end of the year,the company had used up $1,300 of the supplies.The adjusting entry needed at the end of the year is:
A) debit Supplies $1,300;credit Supplies Expense $1,300
B) debit Supplies Expense $1,300;credit Supplies $1,300
C) debit Supplies Expense $2,700;credit Supplies $2,700
D) debit Supplies Expense $4,000;credit Supplies $4,000

Question

Quizplus · Accepted Answer

The adjusting entry needed at the end of the year is to debit Supplies Expense $1,300 and credit Supplies $1,300. This is because the company has already used up $1,300 worth of supplies and needs to recognize that expense in the current period, which is Supplies Expense. The credit goes to Supplies because it is reducing the asset balance to reflect the amount of supplies that have been used up. The other choices either do not reflect the correct amounts or do not properly account for the use of supplies during the year.

A Total of $4,000 in Supplies Was Purchased During the Year.By