Use this information to answer the following question. The trial balance for Nowwick Company appears as follows:
If on December 31,2014,supplies on hand were $120,the adjusting entry would contain a
A)credit to Supplies for $120.
B)credit to Supplies Expense for $180.
C)debit to Supplies Expense for $180.
D)debit to Supplies for $120.

Question

Use this information to answer the following question. The trial balance for Nowwick Company appears as follows:
 If on December 31,2014,supplies on hand were $120,the adjusting entry would contain a
A)credit to Supplies for $120. 
B)credit to Supplies Expense for $180. 
C)debit to Supplies Expense for $180. 
D)debit to Supplies for $120.

Quizplus · Accepted Answer

Since the supplies on hand on December 31, 2014 were $120, it means that supplies used during the year were $180 ($300 - $120 = $180). Therefore, the adjusting entry should debit Supplies Expense for $180 and credit Supplies for $180 to reflect the decrease in supplies on hand and the related expense.

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