Question

A company's Office Supplies account shows a beginning balance of $630 and an ending balance of $460. If office supplies expense for the year is $3,250, what amount of office supplies was purchased during the period?

Answer 1

The correct answer is that there was $3,080 worth of office supplies purchased during the period.

In order to answer this question you know that the company started with $630 worth of office supplies and ended the year with $460 worth, or $170 less than they started with. The company used $170 of supplies from inventory, so they needed to purchase another $3,080 in order arrive at the $3,250 that we know was the total expense during the reporting period.