Question

Smith Company had $1,200 in office supplies at the beginning of the fiscal year. At the end of the fiscal year, Smith Company did an inventory of the office supplies and determined that $400 of supplies remained in the supply room unused. What is the journal entry to adjust for the use of supplies at the end of the fiscal year?

Answer 1

Answer:

supplies expense  800 debit

              supplies              800 credit

--to record year-end adjustment on supplies used--

Explanation:

we will adjust for the amount of supplies consumed over the period:

1,200 beginning - 400 ending = 800 consumed.

We are going to decrease the assets account supplies and recognize na expense account to represent the use of the supplies.

The assets will be credited as is decreasing and the expense debit to make debit = credit