A company has $500 in Supplies before any adjustments. At the end of the year, an adjusting entry is made to debit Supplies Expense for $100. The ending balance in the Supplies account will be:

Question

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The adjusting entry debiting Supplies Expense for $100 means that $100 worth of supplies were used up during the year, leaving $400 ($500 - $100) in the Supplies account at the end of the year.

A Company Has $500 in Supplies Before Any Adjustments