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A company has supplies costing $3,500 in storage, and add $2,600 worth supplies during the month....

A company has supplies costing $3,500 in storage, and add $2,600 worth supplies during the month. At the end of the month, $1,400 worth of supplies left in the storage. Your answer says the expense account affected is “Supplies Expense”. But if this company sells these supplies, shouldn’t it be Cost of Goods Sold, instead of Supplies Expense?

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Ans: If its sold, then the account debited should be cost of goods sold. But usually in normal course of business, supplies term is used for the materials or consumables which are consumed within the organisation. So it should be booked as supplies expenses.

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