Before recording adjusting entries, the Office Supplies account had a $359 debit balance while a physical count of the supplies showed $105 of unused supplies on hand. Thus, the required adjusting entry is
A) Debit Office Supplies $105 and credit Office Supplies Expense $105
B) Debit Office Supplies Expense $254 and credit Office Supplies $254
C) Debit Office Supplies Expense $105 and credit Office Supplies $105
D) Debit Office Supplies $254 and credit Office Supplies Expense $254
E) Some other entry

Question

Quizplus · Accepted Answer

The correct adjusting entry is to debit Office Supplies Expense for $254 and credit Office Supplies for $254. This adjusts the Office Supplies account to the actual unused supplies value of $105 by recognizing the $254 ($359 - $105) of supplies used as an expense.

Before Recording Adjusting Entries, the Office Supplies Account Had a $359