On October 15,20X8,an enterprise fund of Blacksburg purchased office supplies at a cost of $10,000.The inventory of office supplies on hand at the June 30,20X9,fiscal year end was $4,000.There was no beginning inventory.Blacksburg should make entries that include:

Question

Quizplus · Accepted Answer

The correct approach is to debit Supplies for the purchase amount ($10,000) when the supplies are bought. Then, at the fiscal year-end, the remaining inventory value ($4,000) is what stays in the Supplies account, meaning $6,000 worth of supplies was used. This is accounted for by crediting Supplies for $6,000, not by debiting Expenses or Expenditures directly for the used amount. This method reflects the consumption of supplies over the period.

On October 15,20X8,an Enterprise Fund of Blacksburg Purchased Office Supplies