On December 31, Treats Catering Inc.'s trial balance shows a $1,000 balance in the Supplies account. However, a physical count of the supplies determined that only $350 of supplies actually remain in the supply cabinet. Select the adjusting entry made on December 31, to record the amount of supplies that had been used during the year.

Question

Quizplus · Accepted Answer

The adjusting entry should reflect the decrease in the supply account balance from $1,000 to $350 ($1,000 - $350 = $650) due to the supplies used during the year. Therefore, Supplies Expense should be debited for $650 and Supplies should be credited for the same amount. Option C reflects this adjustment correctly.