During the month, a company uses up $4,000 of supplies. At the end of the month, the related adjusting journal entry would result in:

Question

Quizplus · Accepted Answer

Using up supplies represents a decrease in assets (supplies) and since it was used during the month, it represents an expense for the company. Therefore, the adjusting journal entry would result in a decrease in an asset (supplies) and an equal increase in expenses. There is no impact on liabilities or stockholders' equity in this scenario.

During the Month, a Company Uses Up $4,000 of Supplies