On June 1, Green Pea, Inc. purchased $1,200 worth of supplies on account. Prior to the purchase, the balance in the supplies account was $0. On December 31, the fiscal year-end for Green Pea, it is determined that $500 of supplies still remain. What is the balance in the supplies account after adjustment?

Question

Quizplus · Accepted Answer

The supplies account needs to be adjusted by subtracting the amount of supplies that have been used. Since $500 of supplies still remain, that means $700 ($1,200 - $500) worth of supplies have been used. Therefore, the balance in the supplies account after adjustment would be $700.