Question

Shop supplies are expensed when:

a) Consumed.
b) Purchased.
c) Paid for.
d) Ordered.

Answer 1

Shop supplies are expensed when they are consumed.

Step-by-step explanation:

Shop supplies are expensed when they are consumed. When shop supplies are used up or consumed in the course of business operations, they are considered an expense. For example, if a company uses up all its printer ink cartridges, those supplies are expensed because they have been consumed.

Answer 2

Shop supplies are expensed when they are consumed, aligning with the matching principle of accounting that matches expenses with the revenues they help generate in the same period.

This correct answer a) Consumed.

Step-by-step explanation:

The question pertains to when shop supplies should be recorded as an expense in accounting. According to accounting principles, expenses should be recognized when they are consumed, not necessarily when they are purchased, paid for, or ordered.

This concept is known as the matching principle, which dictates that expenses should be matched with the revenues they help to generate within the same accounting period.

Therefore, the correct answer to when shop supplies are expensed is when they are consumed. This ensures that the cost of the supplies is accounted for in the same period as the income earned from the services provided by using those supplies.