Question

A total of $2,800 in supplies was purchased during the year. At the end of the year $700 of the supplies were left. The adjusting entry needed at the end of the year is ____

Answer 1

The adjusting entry to account for the used and remaining supplies at the end of the year involves debiting Supplies Expense for $2,100 and crediting Supplies for $2,100.

Step-by-step explanation:

The adjusting entry needed at the end of the year is to recognize the supplies expense for the amount used during the year and reduce the supplies asset account.

Since $700 worth of supplies is still on hand at the end of the year, it means $2,800 - $700 = $2,100 worth of supplies were used or consumed during the year.

The adjusting entry would be:

Debit Supplies Expense: $2,100

(This recognizes the expense for the supplies used during the year.)

Credit Supplies: $2,100

(This reduces the supplies asset account by the amount used.)

This adjusting entry reflects the decrease in the asset account (Supplies) and the recognition of the expense (Supplies Expense) for the supplies consumed during the year.