Question

Office Depot records supplies in the Supplies account when purchased. At the end of the month, the adjusting journal entry to record the use of supplies would include: a. An increase to supplies and an increase to expenses b. An increase to supplies and an increase to revenue c. A decrease to supplies and an increase to expenses d. A decrease to supplies and a decrease to cash.

Answer 1

C) A decrease to supplies and an increase to expenses

Step-by-step explanation:

When the supplies are bought they should be recorded as following:

• Dr Supplies account
• Cr Cash account (or Accounts Payable account)

At the end of the month after the supplies are used, then the records should be:

• Dr Operating Expenses account
• Cr Supplies account