The entry to adjust for the cost of supplies used during the accounting period is
A) debit Supplies Expense; credit Supplies
B) debit Retained Earnings; credit Supplies
C) debit Accounts Payable; credit Supplies
D) debit Supplies; credit Retained Earnings

Question

Quizplus · Accepted Answer

The cost of supplies used during the accounting period should be charged to Supplies Expense account, which is an income statement account. Therefore, the entry to adjust for the cost of supplies used during the accounting period is to debit Supplies Expense and credit Supplies. This entry would decrease net income for the period by increasing expenses. Option B is incorrect because Retained Earnings is a balance sheet account and is not affected by the cost of supplies used. Option C is incorrect because Accounts Payable is a liability account and would not be affected by the cost of supplies already used during the accounting period. Option D is incorrect as it suggests crediting Retained Earnings, which is incorrect because it is not related to the cost of supplies used.

The Entry to Adjust for the Cost of Supplies Used