Clean Sweep,Inc.started the month of June with $800 worth of cleaning supplies.During the month,Clean Sweep purchased $300 of supplies for cash.At June 30,$200 worth of supplies was unused.How will the company report its unused supplies on June 30?
A)$200 of unused supplies will appear as an expense on the income statement.
B)$900 of unused supplies will appear as an expense on the income statement.
C)$200 of unused supplies will appear as an asset on the balance sheet.
D)$900 of unused supplies will appear as an asset on the balance sheet.

Question

Quizplus · Accepted Answer

The unused supplies at the end of June represent an asset because they still have value and can be used in future operations. As such, they will appear on the balance sheet as an asset. Option A and B are incorrect because unused supplies do not represent an expense until they are used. Option D is incorrect because $900 is the total value of supplies purchased during the month, which includes both the supplies purchased for cash and the unused supplies, but only the unused supplies should be reported as an asset.