Question

The Dress Right Clothing Corporation purchased $2,000 of supplies in July. Assume that Dress Right determines that at the end of July, $1,200 of supplies remain. What is the adjusting entry to record the supplies expense at the end of July?

A) Debit Supplies Expense $2,000, Credit Supplies $2,000
B) Debit Supplies Expense $800, Credit Supplies $800
C) Debit Supplies Expense $1,200, Credit Supplies $1,200
D) Debit Supplies $800, Credit Supplies Expense $800

Answer 1

The correct adjusting entry to record the supplies expense is a debit to Supplies Expense for $800 and a credit to Supplies for $800, reflecting the consumption of supplies during the month.

Step-by-step explanation:

The adjusting entry to record the supplies expense at the end of July for Dress Right Clothing Corporation would be:

Debit Supplies Expense $800, Credit Supplies $800.

This entry reflects the fact that the company used $800 of the supplies purchased during the month ($2,000 - $1,200 remaining). The expense is recorded because these supplies have been consumed in the operation of the business, and the supplies account needs to be decreased by the amount used to represent the current value of supplies on hand.