[SMH2013]

When supplies are purchased they are recorded as an asset. An end of period stock-take (count) revealed a closing balance of $12,000. There was an opening balance of $15, 000 and during the period $11, 000 of supplies were purchased.

[pready]

Your beginning balance plus purchases equals your Supplies account balance. For your adjusting entry you have to bring your Supplies account balance to your actual onhand account balance.

Your adjusting entry will include a Debit to Supplies Expense and a Credit to Supplies. This is to follow the Matching Principle, which is to match expenses to the period they were used to generate revenues.