Question

A company had no office supplies available at the beginning of the year. during the year, the company purchased $410 worth of office supplies. on december 31, $145 worth of office supplies remained. how much should the company report as office supplies expense for the year?

Answer 1

Office supplies expenses for the company for the year is 410- 145 = $265. Though the company purchased supplies worth $410, the whole of it is not consumed during the year and therefore 410 is not the actual expense. Only actual expenses will be recorded as expenses of the year. The remaining supplies will be shown as closing stock and is an asset in the records of the company.