Question

The balance in the supplies account, before adjustment at the end of the year is $725. The proper adjusting entry if the amount of supplies on hand at the end of the year is $300 would be debit Cash $300, credit Supplies $300 debit Supplies Expense $425, credit Supplies $425 debit Supplies Expense $300, credit Supplies $300 debit Supplies $425, credit Supplies Expense $425

Answer 1

Balance in supplies account before adjustment = $725

Ending supplies = $300

Supplies expense = Balance in supplies account before adjustment - Ending supplies

= 725-300

= $425

The adjusting entry to record supplies expense would be:

General Journal	Debit	Credit
Supplies expense	$425
Supplies		$425

Second option is correct option.

Kindly give a positive rating if you are satisfied with this solution and please ask if you have any query.

Thanks