Question

The supplies account had a balance of $4,322 at the beginning of the year and was debited during the year for $2,426, representing the total of supplies purchased during the year. If $212 of supplies are on hand at the end of the year, the supplies expense to be reported on the income statement for the year is

Answer 1

$2214

Explanation:

When doing yout accounts, you should always keep in mind the nature of the accounts you are working with, in this case, supplies expenses are only accountable for those supplies that you have actually used, not the ones that you bought so in this case, eventhoug you spent $2426, you can only report $2214 since you still have $212 worth of supplies on your books still intact.