Question

Adjusting Entry for Supplies The balance in the supplies account, before adjustment at the end of the year, is $1,795. Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is $844.

Answer 1

Answer:

Journal Entry:

Accounting Title	Debit	Credit
Supplies Expense	$951
Supplies		$951

Note:

Supplies expense is a component of Stockholders Equity and it decreased it. So debit Supplies expense by $951

Supplies are an asset for the business and it is decreased by $951. So Credit Supplies by $951

Adjusting Entry Meaning:

Adjusting Entries indicates those entries, Which are passed in the books of accounts at the end of one Accounting period. These entries are passed in the books of accounts as per the revenue recognition principle and the expense recognition principle to adjust the revenue and the expense of a business in the period of their occurance.