Question

Boyce Company purchased office supplies costing $7,000 and debited supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1, 800 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be: A) debit supplies Expense, $1, 800 credit supplies, $1, 800. B) debit supplies Expense, $5, 200 credit supplies. $5, 200. C) debit supplies, $5, 200; credit Supplies Expense, $5, 200. D) debit supplies, $1, 800: credit supplies Expense, $1, 800

Answer 1

Answer:

B) debit supplies Expense, $5, 200 credit supplies. $5, 200.

Explanation:

When supplies are purchased, he entries posted are debit supplies account and credit cash or accounts payable account.

When supplies are used up, the amount of supplies used is credited to the supplies account and debited to the supplies expense account.

This reduces the book balance in the supplies account to what is physically available.

Quantity used up = $7,000 - $1,800

= $5,200

Answer 2

Answer:

B) debit supplies Expense, $5, 200 credit supplies. $5, 200

Explanation:

Compare inventory physical count sheet and the inventory in your accounting system to calculate the difference. If the physical count is lower, you can subtract that number from the accounting system number to find the adjusted journal entry.

Given:

Physical count of office supplies = $1, 800

Purchased office supplies costing = $7,000

Adjusted journal entry = $7000 - $1800

= $5200

Journal Entries are the building blocks of accounting, from reporting to auditing journal entries (which consist of Debits and Credits). Debit the supplies expense account for the cost of the supplies used. Balance the entry by crediting your supplies account.