A company had $5,645 of supplies on hand on January 1. On December 31, a physical count showed $3,000 of supplies remained. The adjusting entry would require a:
A) debit to supplies expense of $3,000.
B) credit to supplies expense of $3,000.
C) debit to supplies expense of $2,645.
D) credit to supplies expense of $2,645.

Question

Quizplus · Accepted Answer

The correct adjusting entry is to recognize the supplies used during the year. The company started with $5,645 and ended with $3,000, so $5,645 - $3,000 = $2,645 of supplies were used. This amount should be debited to Supplies Expense to recognize the expense.

A Company Had $5,645 of Supplies on Hand on January