Question

Thomas Dentists purchased dental supplies costing $12,000 and debited dental supplies for the full amount. At the end of the accounting period, a physical count of dental supplies revealed $7,200 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be:

Select one:

a. Debit dental supplies, $7,200; Credit dental supplies expense, $7,200.

b. Debit dental supplies expense, $7,200; Credit dental supplies, $7,200.

c. Debit dental supplies, $12,000; Credit dental supplies expense, $12,000.

d. Debit dental supplies expense, $4,800; Credit dental supplies, $4,800.

Answer 1

Solution:

The correct answer is option d.

Explanation: When supplies purchased are used during the year, they will account as supplies expense, here $12,000 supplies are purchased , which is current asset , out of $12,000 , $7,200 supplies are stiil on hand , means are not used during the year , so $12,000 - $7,200 = $4,800 are used , accounts as supplies expense and supplies balance is decreased , so adjusting entry for the year end would have been

Supplies Expense Dr $4,800

Supplies Cr $4,800

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