Which of the following shows how the year-end adjustment to recognize supplies expense will affect a company's financial statements?
A) Option A
B) Option B
C) Option C
D) Option D

Question

Which of the following shows how the year-end adjustment to recognize supplies expense will affect a company's financial statements? 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Quizplus · Accepted Answer

Option B shows that recognizing the supplies expense will decrease net income and decrease retained earnings on the balance sheet. It will also decrease the current assets (supplies) and increase the expenses on the income statement. This is the correct impact of the year-end adjustment to recognize supplies expense on the financial statements.

Which of the Following Shows How the Year-End Adjustment to Recognize