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When a firm purchases supplies for use in its business, and the cost of the supplies
Asked Nov 14, 2010, 04:28 PM
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2 Answers 13. When a firm purchases supplies for use in its business, and the cost of the supplies purchased is recorded as an asset, the following adjustment to recognize the cost of supplies used will probably be required: A. Dr Supplies Cr Accounts payable B. Dr Supplies Cr Supplies expense C. Dr Supplies expense Cr Supplies D. No adjustment will probably be required. |
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| When they say the cost of supplies is recorded as an asset, they are telling you that they are put into a Supplies account on the Balance Sheet, a current asset. They then write them off to an expense account as they are used. The correct answer is C. If you don't understand why, please ask. This is a common type of entry and you'll run into similar entries as you continue in your class. | ||||
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