The supplies account has a balance of $1,000 on January 1. During January, the company purchased $25,000 of supplies on account and the liability was appropriately recorded. A count of supplies at the end of January indicates a balance of $3,000. Which one of the following is a correct amount to be reported on the company's financial statements for the month ending January 31?

Question

Quizplus · Accepted Answer

The supplies expense is calculated as the beginning balance ($1,000) plus purchases ($25,000) minus the ending balance ($3,000), which equals $23,000.

The Supplies Account Has a Balance of $1,000 on January