Question

On January 1, the Office Supplies account had a \$600 balance. On December 31 (end of...

On January 1, the Office Supplies account had a \$600 balance. On December 31 (end of year), a count revealed that \$400 of supplies were still unused. During the year, \$800 of supplies were purchased and recorded as an expense. The required adjusting journal entry to be recorded on December 31 is

Debit Supplies Expense 1,000, credit Supplies 1,000

The correct answer is not listed.

Debit Supplies Expense 200, credit Supplies 200

Debit Supplies Expense 800, credit Supplies 800

Debit Supplies 200, credit Supplies Expense 200

Answer: Debit Supplies Expense 200, Credit Supplies 200

Explanation:

The adjusting entries are recorded at the end of accounting period, If there is any adjusments are required. The Supplies at the beginning balance is \$600 and purchases \$800, actually purchases record as purchases and add to beginning balance but it record as expense. So ending balnce is \$400 then the adjustment of supplies expense balance is \$200.

Entry:

Supplies expense \$200

Supplies \$200

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