[dolce5287]

I am having a problem with understanding what account gets credited if the supplies expense is a debit.

In the problem, there is a supplies expense of 0, but after adjustments the supplies expense is 3300. There is no supplies payable account; only accounts payable, interest payable, rent payable.


What account gets credited?

PLEASE HELP!

[morgaine300]

This is sounding like an adjusting entry to me, but I could be wrong about that. The "proper" way to do it is to put your supplies into an asset account when they are purchased. Then you would expense the used portion at the end of an accounting period. That entry consists of a debit to Supplies Expense and a credit to the Supplies account, for the amount used. But you'd either have to know how got used, or know how much is left over and the subtract to get the used portion. (i.e. where did the 3300 come from?) If this is for homework, I'm sure that's probably what you're supposed to be doing.

If this is a real company, many times they directly expense the supplies purchased, rather than putting it into an asset account. In fact, every place I've ever worked that's what we did. Since you seem to be looking for a payable account, it makes me wonder if that's not what you're doing. If that's the case, it just goes into Accounts Payable if you've put it on credit. There wouldn't be a separate supplies payable account. Accounts Payable is for all your everyday normal stuff with suppliers and vendors. We use separate payable accounts for stuff like salaries, taxes and other things that aren't normal "vendors."

[bisavr1]

The Supplies account has a preliminary balance of $6000. However, a count of the supplies
Actually on hand indicates that the true amount of supplies is $2700. This means that the
Preliminary balance is too high by $3300 ($6000 minus $2700). A credit of $3300 will need to be
Entered into the asset account in order to reduce the balance from $6000 to $2700. The related
Income statement account is Supplies Expense.

The adjusting entry for Supplies in general journal format is:

Date Account Name Debit Credit
Dec. 31, 2009 Supplies Expense 3300
Supplies 3300

Notice that the ending balance in the asset Supplies is now $2700—the correct amount of
Supplies that the company actually has on hand. The income statement account Supplies
Expense has been increased by the $3300 adjusting entry. It is assumed that the decrease in
The supplies on hand means that the supplies have been used during the current accounting
Period. The balance in Supplies Expense will increase during the year as the account is
Debited. Supplies Expense will start the next accounting year with a zero balance. The balance
In the asset Supplies at the end of the accounting year will carry over to the next accounting
Year