Question

Supplies on hand were $ 1 comma 000 at the start of the year. At the end of the​ year, it was determined that $ 450 of supplies had been used. What is the adjusting entry for​ supplies?
a. Debit supplies​ expense, $ 550​; credit​ supplies, $ 550
b. Debit supplies​ expense, $ 450​; credit​ supplies, $ 450
c. Debit​ supplies, $ 450​; credit supplies​ expense, $ 450
d. Debit​ supplies, $ 550​; credit supplies​ expense, $ 550

Answer 1

Determination of adjusting entry for Supplies used:

In the given case it is given those Supplies on hand were $ 1,000 at the start of the year. At the end of the year, it was determined that $ 450 of supplies had been used. It means the adjustment is needed to make for the amount of supplies used $450.

The adjusting entry for Supplies used shall be as follows:

Supplies Expense  Debit      $450

Supplies                 Credit                    $450

(Being adjustment made for Supplies used)

Hence the correct answer is:

b. Debit supplies expense, $ 450; credit supplies, $ 450