Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Adjusting Entries: Supplies

Financial Accounting

3. Accrual Accounting Concepts

Adjusting Entries: Supplies

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Multiple Choice

Which of the following is the correct adjusting journal entry to record supplies used as supplies expense at the end of the accounting period?

Debit Supplies Expense; Credit Supplies

Debit Supplies; Credit Supplies Expense

Debit Supplies Expense; Credit Cash

Debit Cash; Credit Supplies Expense

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Verified step by step guidance

Understand the concept: Adjusting journal entries are made at the end of the accounting period to update accounts for revenues earned and expenses incurred during the period. Supplies expense is recorded when supplies are used, reducing the Supplies account and increasing the Supplies Expense account.

Identify the accounts involved: Supplies Expense is an expense account, and Supplies is an asset account. When supplies are used, the value of the Supplies asset decreases, and the Supplies Expense increases.

Determine the correct journal entry: To record supplies used, you need to debit Supplies Expense (to increase the expense) and credit Supplies (to decrease the asset). This reflects the consumption of supplies during the period.

Eliminate incorrect options: Review the provided options and eliminate entries that involve Cash, as cash is not part of this transaction. Supplies Expense and Supplies are the only relevant accounts.

Select the correct entry: The correct adjusting journal entry is 'Debit Supplies Expense; Credit Supplies,' as this properly reflects the use of supplies during the accounting period.