At the beginning of its first year of operations,Bumper Corp.purchased $4,000 of supplies,which were debited to the Supplies account.They did not purchase any other supplies during the year.At the end of the year,it has $800 of supplies left.The appropriate adjusting journal entry is:
A)Debit Supplies Expense $3,200 and credit Supplies $3,200.
B)Debit Supplies $3,200 and credit Supplies Expense $3,200.
C)Debit Supplies $800 and credit Supplies Expense $800.
D)Debit Supplies Expense $800 and credit Supplies $800.

Question

Quizplus · Accepted Answer

Supplies used = Beginning balance + Supplies purchased − Supplies on hand
= $0 + $4,000 − $800 = $3,200
The adjusting entry includes a debit to Supplies Expense $3,200 (for the amount used)and a credit to Supplies $3,200 (to decrease the Supplies account to the amount on hand at the end of the year).

At the Beginning of Its First Year of Operations,Bumper Corp