Pooley Electric Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,600 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be

Question

Quizplus · Accepted Answer

The correct adjusting journal entry is to debit Office Supplies Expense for $2,400 and credit Office Supplies for $2,400. This entry reflects the expense of the supplies used during the period ($4,000 initially recorded - $1,600 still on hand = $2,400 used).

Pooley Electric Company Purchased Office Supplies Costing $4,000 and Debited