Question

"during its first year of business, xyz inc. purchased $1,600 of supplies. by the end of the year, only $500 of supplies remain in the supply cabinet. determine the amount to be reported in the supplies account in the adjusted trial balance section of the worksheet prepared on december 31."

Answer 1

The correct answer is $500.

An adjusted trail balance is prepared at the end of the accounting period. On this statement you will have what the value of the supplies in inventory is on the last day of the accounting cycle. In this example there are $500 worth of supplies left, which is why it is the correct answer.