Asked by Samantha Adams on Jul 08, 2024
Verified
On January 1, Great Designs Company had a debit balance of $1,450 in the office supplies account. During the month, Great Designs purchased $115 and $160 of office supplies and journalized them to the asset account upon purchasing. On January 31, an inspection of the office supplies cabinet shows that only $350 of office supplies remains. Prepare the January 31 adjusting entry for office supplies.
Debit Balance
A financial account status where the total debits exceed the total credits, indicating an amount owed.
Office Supplies
Items used in offices on a regular basis for the purpose of carrying out tasks and operations, including pens, paper, and staplers.
Asset Account
An account on a balance sheet that represents a resource controlled by the entity as a result of past transactions and from which future economic benefits are expected.
- Understand thoroughly the purpose and methods involved in entering adjusting entries during the accounting cycle.
- Recognize and organize journal entries for different adjusting entries including prepayments, accruals, and depreciation.
- Recognize the importance of supplies and inventory adjustments and their effect on financial reporting.
Verified Answer
Learning Objectives
- Understand thoroughly the purpose and methods involved in entering adjusting entries during the accounting cycle.
- Recognize and organize journal entries for different adjusting entries including prepayments, accruals, and depreciation.
- Recognize the importance of supplies and inventory adjustments and their effect on financial reporting.
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