Muldoon Advertising has an opening balance in its supplies account of $2,400 and purchases $3,000 of supplies during the year.A year-end physical count shows $2,800 in supplies inventory.Which is the appropriate journal entry at year end?
A)Dr Supplies Expense $2,600
Cr Supplies $2,600
B)Dr Supplies Expense $2,800
Cr Supplies $2,800
C)Dr Supplies $2,600
Cr Supplies Expense $2,600
D)Dr Supplies $3,000
Cr Cash $3,000

Question

Muldoon Advertising has an opening balance in its supplies account of $2,400 and purchases $3,000 of supplies during the year.A year-end physical count shows $2,800 in supplies inventory.Which is the appropriate journal entry at year end?
A)Dr Supplies Expense $2,600 
Cr Supplies $2,600
B)Dr Supplies Expense $2,800 
Cr Supplies $2,800
C)Dr Supplies $2,600 
Cr Supplies Expense $2,600
D)Dr Supplies $3,000 
Cr Cash $3,000

Quizplus · Accepted Answer

The supplies used during the year is the opening balance plus purchases minus the ending inventory: $2,400 + $3,000 - $2,800 = $2,600. Therefore, Supplies Expense is debited and Supplies is credited for $2,600.

Muldoon Advertising Has an Opening Balance in Its Supplies Account