A physical count of supplies on hand at the end of May for Masters,Inc.indicated $1,250 of supplies on hand.The general ledger balance before any adjustment is $2,100.What is the adjusting entry for office supplies that should be recorded on May 31?
A)Debit Supplies Expense $1,250 and credit Supplies $1,250.
B)Debit Prepaid Supplies $850 and credit Supplied Expense $850.
C)Debit Supplies Expense $1,250 and credit Supplies $2,100.
D)Debit Supplies $1,250 and credit Cash $1,250.
E)Debit Supplies Expense $850 and credit Supplies $850.

Question

Quizplus · Accepted Answer

The adjusting entry should reflect the amount of supplies used, which is the difference between the ledger balance ($2,100) and the physical count ($1,250), resulting in $850. Therefore, debit Supplies Expense $850 and credit Supplies $850.

A Physical Count of Supplies on Hand at the End