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

Previous problemNext problem

Struggling with Financial Accounting?

Join thousands of students who trust us to help them ace their exams!Watch the first video

Multiple Choice

Which of the following transactions would most likely require an adjusting entry for supplies at the end of the accounting period?

Supplies were purchased and immediately expensed upon purchase.

No supplies were purchased or used during the period.

Supplies were purchased and fully used on the same day.

Supplies were purchased during the period and recorded as an asset, but some remain unused at period end.

Previous problemNext problem

Verified step by step guidance

Understand the concept of adjusting entries: Adjusting entries are made at the end of an accounting period to update account balances before financial statements are prepared. They ensure that revenues and expenses are recognized in the period they occur.

Identify the scenario requiring adjustment: In this case, supplies were purchased during the period and recorded as an asset. At the end of the period, some supplies remain unused, meaning the asset account (Supplies) needs to be adjusted to reflect the actual amount of supplies used.

Determine the accounts involved: The adjustment will involve reducing the Supplies asset account and recognizing the expense for the supplies used during the period in the Supplies Expense account.

Calculate the adjustment amount: To determine the adjustment, calculate the difference between the beginning balance of the Supplies account, any purchases made during the period, and the ending balance of unused supplies. The formula is: \( \text{Supplies Used} = \text{Beginning Balance} + \text{Purchases} - \text{Ending Balance} \).

Record the adjusting entry: Prepare the journal entry to decrease the Supplies account (credit) and increase the Supplies Expense account (debit) by the amount of supplies used during the period.