A company purchased office supplies costing $3,000 and debited Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $900 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be:

Question

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The company initially recorded $3,000 in Supplies. At the end of the period, $900 worth of supplies remain, meaning $2,100 worth of supplies were used. Therefore, Supplies Expense should be debited $2,100, and Supplies should be credited $2,100 to reflect the used supplies.

A Company Purchased Office Supplies Costing $3,000 and Debited Supplies