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?
A)Debit Cash $4,200,credit Supplies $4,200.
B)Debit Supplies $4,200,credit Supplies Expense $4,200.
C)Debit Supplies Expense $4,200,credit Supplies $4,200.

Question

Quizplus · Accepted Answer

The appropriate month-end adjusting entry would be to recognize the supplies that were used up during the month as an expense by debiting Supplies Expense $4,200, and credit the remaining balance of Supplies $800 (the difference between the beginning balance of $2,000 and supplies purchased of $3,000) and reduce the balance to the actual supplies on hand. Therefore, choice C is the correct answer. Choices A and B are incorrect because they do not properly account for the supplies used during the month as an expense.

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