Greese Company purchased office supplies costing $7,000 and debited Supplies for the full amount.At the end of the accounting period, a physical count of office supplies revealed $2,500 still on hand.The appropriate adjusting journal entry to be made at the end of the period would be:
A)debit Supplies Expense, $2,500; credit Supplies, $2,500.
B)debit Supplies, $4,500; credit Supplies Expense, $4,500.
C)debit Supplies Expense, $4,500; credit Supplies, $4,500.
D)debit Supplies, $2,500; credit Supplies Expense, $2,500.

Question

Quizplus · Accepted Answer

The adjusting entry should recognize the used supplies as an expense. Since $7,000 was initially recorded and $2,500 remains, $4,500 worth of supplies were used. Therefore, debit Supplies Expense and credit Supplies for $4,500.

Greese Company Purchased Office Supplies Costing $7,000 and Debited Supplies