Question

The policy at Sunland Company is to expense all office supplies at the time of purchase. On the last day of the accounting period, there are $1060 of unused office supplies on hand and the balance of supplies expense is $3360. What should the accountant do?

Answer 1

Answer:

debit Supplies and credit Supplies Expense for $1,060

Explanation:

Based on the information provided within the question it can be said that the best option in this scenario would be to debit Supplies and credit Supplies Expense for $1,060. Since the policy states that they need to expense all office supplies then they must do that, but since they still have $1060 which they do not have then they will need to credit that supply expense and pay it back later.