The Town Laundry purchased $5,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $3,000 on hand. The adjusting entry that should be made by the company on June 30 is

Question

Quizplus · Accepted Answer

The correct adjusting entry is to debit Laundry Supplies Expense for $2,500 and credit Laundry Supplies for $2,500. This reflects the use of $2,500 worth of supplies during the period, reducing the asset (Laundry Supplies) and recognizing the expense (Laundry Supplies Expense).

The Town Laundry Purchased $5,500 Worth of Laundry Supplies on June