Question

if the balance of supplies at the start of the month was $900 and at the end of the month you had $450 on hand, the adjustment for supplies would be __________. a. $450 b. $550 c. $350 d. $900

Answer 1

The answer for this question would be a) $450.

Answer 2

Answer:

The answer is: a

Explanation:

At year end, companies have to close off accounts so that they can generate financial statements. One way to do this is to make adjustments in the accounting records to include any transactions that had not been included in the accounting records as at a specified date, such as the end of the financial reporting period of a company.

In this instance, the account information is presented as follows:

Opening Balance-Supplies: $ 900

Supplies expense:               ($ 450)

Closing Balance-Supplies:  $ 450

The amount of supplies used up during the period is classified as a business expense as the supplies can no longer be used to generate income for the business. The amount on hand is classified as an asset because the supplies can be used to generate future cash flows for the business. Therefore, the adjustment in the supplies account would be a credit entry of $450 and a debit entry of $450 in the supplies expense account.