During a company's first year,the asset account,Office Supplies,was debited for $2,300 for the purchases of supplies.At year-end,office supplies on hand were counted and determined to be $825.The proper adjusting entry crediting supplies and debiting supplies expense will
A)increase expenses and decrease assets by $1,475.
B)decrease assets and increase expenses by $825.
C)increase expenses and increase assets by $1,475.
D)have no effect on net income or the accounting equation.

Question

Quizplus · Accepted Answer

The adjusting entry will decrease the Office Supplies asset account by $1,475 ($2,300 - $825) and increase the Supplies Expense by the same amount, thus increasing expenses and decreasing assets.

During a Company's First Year,the Asset Account,Office Supplies,was Debited for $2,300