Question

Wk.4 - Apply: Exercisei Saved Help Save & Exit Submit The Supplies account has a trial balance of $3,196. A year- end inventory shows $1,746 worth of supplies left at the end 10 of the year. The correct adjusting entry is: 12 points Multiple Choice Skipped debit Sunnlies Exnense $3 196 Mc Graw Hill Education Prev 10 of 10 Next

Answer 1

The adjusting entries are passed at the end of the accounting so that the correct income statement and balance sheet can be prepared. The matching principle of accounting states that all expenses and revenues are to be shown in the accounting period irrespective of the actual sum received or paid.

The adjusting entry in journal is shown below;

As supplies account has balance has $3196 and year end inventory of $1746 thr difference amount of $1450 will be adjusted by debiting supplies expense account and crediting supplies account to reduce the balance.

Date	Account title and Explanation	Debit ($)	Credit ($)
	Supplies expense	1450
	Supplies		1450
	( To record the supplies expense for the year $3196 - $1746)