The adjustment for supplies used during the period will result in a debit to the supplies expense account and a credit to the supplies account.
What do you understand by supplies expense?
- The cost of office supplies in inventory at the end of the accounting period should match the balance in a current asset account, such as inventory or supplies.
- The cost of office supplies consumed during the accounting period should be posted on the income statement to the Consumables Expense account. When purchasing consumables, the amount will be debited to Supplies.
- At the end of the accounting period, the balance in the Inventory account will be adjusted to the amount in the cash register and the amount of the adjustment item will be posted to Inventory Expense. (If the amount of inventory on hand is insignificant, the company can simply deduct the cost of consumables when purchasing the inventory.)
To learn more about adjusting entries, refer to:
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