At the beginning of December,Global Corporation had $2,000 in supplies on hand.During the month,supplies purchased amounted to $3,000,but by the end of the month the supplies balance was only $800.What is the appropriate month-end adjusting entry?

Question

Quizplus · Accepted Answer

The supplies on hand at the end of the month is only $800, which means that $4,200 worth of supplies were used up during the month ($2,000 beginning balance + $3,000 purchases - $800 ending balance). Therefore, the appropriate adjusting entry is to debit Supplies Expense for $4,200 and credit Supplies for $4,200. Option A and D do not reflect the amount of supplies used up during the month. Option B is not appropriate because it does not reflect the reduction in the supplies on hand at the end of the month.

At the Beginning of December,Global Corporation Had $2,000 in Supplies