Question

Purchased $500 of supplies on December 5. As of December 31, we have used up $200 of the supplies.

Give the adjusting entry at December 31?

Answer 1

The adjusting entry at December 31 would be to debit the Supplies Expense account for $200 and credit the Supplies inventory account for $200.

Step-by-step explanation:

The adjusting entry at December 31 would be to debit the Supplies Expense account for $200 and credit the Supplies inventory account for $200.

This entry is necessary because the supplies that were purchased in December have been partially used up. By debiting the Supplies Expense account, we are recognizing the expense of the supplies that have been used. And by crediting the Supplies inventory account, we are reducing the amount of supplies that are still on hand.

The adjusting entry can be summarized as follows:

• Debit Supplies Expense $200
• Credit Supplies $200