Question

1A. At year end, a physical count of office supplies reveals that $3,000 of supplies were...

1A. At year end, a physical count of office supplies reveals that $3,000 of supplies were used up but no adjusting entry was made to account for this. If this error is found, it will most likely be because

a. the trial balance would be out of balance by $3,000

b. the trial balance would be out of balance by $6,000

c. the trial balance would be out of balance by $1,500

d. none of the above

1B. If the omission in 1A is found before the books are closed, the adjusting entry to correct the error will include

a. a debit to Office Supplies Expense

b. a credit to Office Supplies Expense

c. a debit to inventory

d. none of the above

1C. The type of error in 1A is known as...

a. a deferral error

b. an accural error

c. a prior period error

d. none of the above

Please explain.

Homework Answers

Answer #1

1A.D.none of the above.

This error cannot be found from trail balance since , it is an error of omission to record an item of expense.

The supplies expense has altogether been ignored from being recorded, this will not directly affect the trail balance , but will affect the income statement and balance sheet.

1B.a. a debit to office supplies expense account.

the following will be the adjusting journal entry:

office supplies expenseaccount 3,000
...............To office supplies a/c 3,000

1C a deferral error

deferring the unused supplies expense to next year has not been made here, so this is a deferral error

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