Question

The supplies account of ABC Corp. on December 31 shows a balance of $4,000. An actual count of the supplies shows the balance is $3,400. 4. What should be recorded to the accounting equation to adjust the balance in the supplies account to properly reflect the balance at December 31? a. Assets Liabilities Equity

I am not sure how to fill this this out? Thanks!

Answer 1

Ans: Supplies here means sales

Since Supplies account is recorded $600 in excess, the accounts receivables also excess to the equal amount.

Therefore,

Supplies A/c Dr                          $600

To accounts receivable A/c        $600

Assets                                            Liabilities                                    Equity                 

Supplies A/c $600                           Accounts receivable $600               0