Question

Prior to recording adjusting entries, the Office Supplies account had a $372 debit balance. A physical count of the supplies showed $112 of unused supplies available. The required adjusting entry is:

Answer 1

Complete Question:

Prior to recording adjusting entries, the Office Supplies account had a $372 debit balance. A physical count of the supplies showed $112 of unused supplies available. The required adjusting entry is:

Debit office supplies expense , $650; credit cash, $650

Debit Cash, $650; credit office supplies, $650

Debit office supplies, $650 ; credit cash, $650

Debit office supplies, $650; Credit accounts payable, $650

Debit accounts payable, $650 ; credit cash, $650

Answer:

The required adjusting entry is: Debit accounts payable, $650 ; credit cash, $650

Explanation:

Adjustment entries are log entries documented in various major accounts at the close of the financial period to change the final balances.

Such changes are being carried out in order to better match the records and financial condition of an organization with accounting system standards, such as the GAAP and IFRS. This includes the tracking of revenues with expenses underneath the matching principle, and thus affects the level of income and expenditure reported.