Question

Adjusting Entry for Supplies The balance in the supplies account, before adjustment at the end of the year, is $1,654. Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is $777.

Answer 1

The adjustment is:

= Balance in supplies account - Supplies on hand

= 1,654 - 777

= $877

This amount will be sent to the Supplies expense account to show that it was incurred as an expense during the period but was not accounted for. Expenses are debited when they increase.

Date Account Title Debit Credit

XX-XX-XXXX Supplies expense $877

Supplies $877