Question

$800 of supplies were purchased at the beginning of the month and the Supplies account was increased. As of the end of the period, $200 of supplies still remain.
Which of the following is the correct adjusting entry?

a.Supplies expense would be debited for $600.

b.Supplies expense would be debited for $200

c.Supplies would be credited for $200.

d.Supplies would be debited for $200.

Answer 1

Answer:

a.Supplies expense would be debited for $600.

Explanation:

Assuming there is no opening Inventory:

End of period supplies balance = Opening balance  + purchases in the period - Expense for the period

200 = 0  + 800 - Expense for the period

Expense for the period = 800 - 200

Expense for the period = 600

So the correct option is a.Supplies expense would be debited for $600.