Question

The Store Supplies account had a $360 debit balance at the end of the accounting period before adjustment for supplies used, and an inventory of $80 worth of unused supplies were on hand. Which of the following is the required adjusting entry?
A. Debit Store Supplies $280 and credit Store Supplies Expense $280.
B. Debit Store Supplies Expense $280 and credit Store Supplies $280.
C. Debit Store Supplies $80 and credit Store Supplies Expense $80.
D. Debit Store Supplies Expense $80 and credit Store Supplies $80.

Answer 1

Debit Store Supplies Expense $280 and credit Store Supplies $280

Explanation:

The adjustment of accounts is a log report that typically is made at the end of a fiscal period to attribute income and costs to the time they actually existed. To order to adjust the entries for the accrued and deferred profits in accrual-based accounting the concept of revenue recognition is the basis. Sometimes they are called day balances because it is performed on the day of equilibrium.

Prepayment adjustment entries are necessary to take into account cash received before goods have been delivered or services have been completed. Once paying this currency, it is first reported in a Prepaid Cost Investment account; either the duration (e.g. rent, insure) or use and use (e.g. provision) of the plan must be assessed.