Assuming that purchases of supplies were debited to the Supplies asset account when made, an adjustment for supplies would indicate

Question

Quizplus · Accepted Answer

An adjustment for supplies would indicate the amount used up, as this adjustment is necessary to record the supplies that have been consumed during the accounting period and reduce the asset account balance accordingly. The amount bought would have already been recorded as a debit to the Supplies asset account, and the amount on hand would be the difference between the beginning balance and the amount used up. The amount on the trial balance may or may not be relevant to this adjustment, as it depends on whether the balance on the trial balance accurately reflects the true balance of the Supplies asset account.

Assuming That Purchases of Supplies Were Debited to the Supplies