Question

Supplies originally cost $600, but only $150 worth of supplies were used this period. The adjusting entry

a. debit Supplies Expense, $450; credit Supplies, $450.
b. debit Supplies, $150; credit Supplies Expense, $150.
c. debit Supplies, $450; credit Supplies Expense, $450.
d. debit Supplies Expense, $150; credit Supplies, $150

Answer 1

The correct adjusting entry in this case would be option d. debit Supplies Expense, $150; credit Supplies, $150. When supplies are purchased but not all of them are used within the accounting period, an adjusting entry needs to be made to reflect the correct amount of supplies that were used.

Step-by-step explanation:

The correct adjusting entry in this case would be option d. debit Supplies Expense, $150; credit Supplies, $150.

When supplies are purchased but not all of them are used within the accounting period, an adjusting entry needs to be made to reflect the correct amount of supplies that were used. In this case, only $150 worth of supplies were used, so the Supplies Expense account needs to be debited by $150 to show the expense. At the same time, the Supplies account needs to be credited by $150 to reduce the balance to reflect the remaining unused supplies.

By making this entry, the correct amount of supplies used during the period is accounted for and the financial statements will accurately reflect the expenses incurred.