Question

Supplies originally cost 600, but only 150 worth of supplies were used this period. The adjusting entry would be?

1) debit supplies expense, 450; credit supplies, 450
2) debit supplies, 450; credit supplies expense, 450
3) debit supplies 150; credit supplies expense 150
4) debit supplies expense, 150; credit supplies, 150

Answer 1

The correct adjusting entry is to debit Supplies Expense for $150 and credit Supplies for the same amount to match the cost of supplies used to the period they were consumed.

Step-by-step explanation:

The adjusting entry for the supplies that were originally costing $600, but with only $150 worth used, would be to debit Supplies Expense for the amount of supplies used (in this case, $150) and credit Supplies for the same amount. This reflects the expense recognition principle, matching the cost of the supplies used to the period in which they were consumed. Therefore, the correct option is 4) debit Supplies Expense, $150; credit Supplies, $150.

Option 4) Debit Supplies Expense, $150; Credit Supplies, $150

When recording the adjusting entry for unused supplies, we debit the Supplies Expense account to recognize the expense for the supplies that were not used during the period. At the same time, we credit the Supplies account to reduce its balance by the value of the unused supplies.