A total of $2,800 in supplies was purchased during the year. At the end of the year $700 of the supplies were left. The adjusting entry needed at the end of the year is:
A)debit Supplies Expense $700; credit Supplies $700
B)debit Supplies Expense $2,800; credit Supplies $2,800
C)debit Supplies Expense $2,100; credit Supplies $2,100
D)debit Supplies $2,100; credit Supplies Expense $2,100

Question

Quizplus · Accepted Answer

The adjusting entry needed is to account for the supplies that were used up during the year, which is the difference between the total supplies purchased ($2,800) and the supplies left over at the end of the year ($700), which equals $2,100. Therefore, the correct entry is to debit Supplies Expense for $2,100 and credit Supplies for $2,100. Option A is incorrect because it only accounts for the supplies left over at the end of the year and not the supplies that were used, while option B debits a higher amount than the actual supplies used. Option D reverses the debit and credit accounts, which is not in accordance with generally accepted accounting principles.

A Total of $2,800 in Supplies Was Purchased During the Year