Failure to record the used portion of supplies on hand during the month has the following effect on the financial statements prepard at the end of the month

1. understates net incom
2. overstates assets
3. overstates liabilities
4. understate owner equity

Please do not post duplicates. It tends to confuse the masses.

When suplies are purchased ,at the time of purchase we can pass two accounting entries , ist we can consider the supplies as expence for the year and accounting entries are
Suppliess expence (Dr )
Cash (cr)
And we can also treat the supplies as an asset for bysiness at the time of purchase and when we consider them as asset we can pass an accounting entry
Supplies (DR) considering them as Asset
Cash (cr) as decrease in cah
And then we made the adjustment accordingly at the end of period and they effect our income statement and balance sheet accordingly

So please clear first we treat supplies as an expence at the time of purchase r as an asset as the time of purchase , from [email protected]

what are the useful of classification method of fixed and variable costs for management decision making