Question

On December 31, the balance in the office supplies account is $1,300. A physical count shows $510 worth of supplies on hand

Required:
Prepare the adjusting entry tor supplies.: Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Date Account title Debit Credit

December 1 Office Supplies Expense $790

Office Supplies $790

Step-by-step explanation:

Office supplies is an asset but when it is used it should be debited to the office supplies expense account because it becomes an expense that should be catered for in the Income statement.

The office expense that is used for the year is:

= Book balance - Physical inventory

= 1,300 - 510

= $790