Question

$1,000 of supplies were purchased at the beginning of the month. $300 were used during the month. (The Supplies account was increased at the time of the initial purchase.) Demonstrate the required adjusting journal entry by selecting from the choices below. (Check all that apply.)
A) Supplies would be credited for $300.
B) Supplies expense would be debited for $700.
C) Supplies expense would be debited for $300.
D) Supplies expense would be credited for $300.
E) Supplies would be debited for $300.

Answer 1

Answer:

C) Supplies expense would be debited for $300.

Explanation:

The journal entry to record the purchase of supplies

Dr Supplies 1,000

    Cr Cash 1,000

The journal entry to record the use of supplies

Dr Supplies expense 300

    Cr Supplies 300

Since supplies account is an asset, when it increases it is debited. When the account decreases, it is debited.

Answer 2

Answer:

Option A-supplies would be credited for $300

Option C-supplies expense would be debited for $300.

Explanation:

The adjusting entries for supplies used at the end of the month is to credit supplies (asset account) with the amount of supplies used which was $300 while supplies expense in the income statement is debited with $300

The correct answers, in essence, are the options A, supplies would be credited with $300 and C, supplies expense would be debited with $300