Question

The Unadjusted Trial Balance columns of a company's work sheet shows the Store Supplies account with a balance of 750. The Adjustments columns show a credit of425 for supplies used during the period. The amount shown as Store Supplies in the Balance Sheet columns of the work sheet is:

1) $325 debit
2) $325 credit
3) $425 debit
4) $750 debit
5) $425 credit

Answer 1

The correct answer is 1. After adjusting for supplies used (a $425 credit), the Store Supplies in the Balance Sheet columns of the work sheet will show a balance of $325 as a debit, reflecting the remaining value of the supplies after consumption.

Step-by-step explanation:

The question pertains to the adjustments made to the Store Supplies account in the preparation of financial statements for a company. Given an unadjusted trial balance showing a balance of $750, and the Adjustments columns indicating a credit of $425 for supplies used, we are tasked with finding the value that will appear in the Balance Sheet columns after the adjustment has been made.

To determine this, we subtract the amount used ($425) from the unadjusted balance ($750), which results in a final balance of $325 ($750 - $425 = $325). This final balance will be recorded on the debit side of the Balance Sheet columns because store supplies are an asset, and the decrease in assets due to consumption is reflected as a debit adjustment.

Therefore, the amount shown as Store Supplies in the Balance Sheet columns of the work sheet after adjustment is $325 debit.