Question

At year end, a physical count of office supplies reveals that $7,000 of supplies were used up but no adjusting entry was made to account for this. Can this error be found on a trial balance?

What type of error is this?

Answer 1

No, this error cannot be found on a trial balance. It is an error of omission.

Step-by-step explanation:

No, this error cannot be found on a trial balance. The trial balance is used to ensure that the amount of debits and credits in the general ledger are equal. However, this error involves supplies being used up but not accounted for through an adjusting entry.

This error is known as an error of omission. It occurs when a transaction or event is completely omitted from the accounting records. In this case, the office supplies that were used up should have been recorded as an expense, decreasing the supplies account and increasing the expense account.

To correct this error, an adjusting entry should be made at year end to account for the supplies that were used up. This entry would decrease the supplies account and increase the expense account, reflecting the decrease in assets and the increase in expenses.