Clean Sweep,Inc.started the month of June with $600 worth of cleaning supplies.During the month,Clean Sweep purchased $400 of supplies for cash.At June 30,$300 worth of supplies was unused.How will the company report its unused supplies on June 30?
A)$400 of unused supplies will appear as an expense on the income statement.
B)$700 of unused supplies will appear as an expense on the income statement.
C)$300 of unused supplies will appear as an asset on the balance sheet.
D)$700 of unused supplies will appear as an asset on the balance sheet.

Question

Quizplus · Accepted Answer

Unused supplies represent an asset. The company will report $300 of unused supplies as an asset on the balance sheet at the end of the month. It is not an expense until the supplies are actually used.