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Office Depot records supplies in the Supplies account when purchased. At the end of the month, the adjusting journal entry to record the use of supplies would include: a. An increase to supplies and an increase to expenses b. An increase to supplies and an increase to revenue c. A decrease to supplies and an increase to expenses d. A decrease to supplies and a decrease to cash.

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jepessoa

Answer:

C) A decrease to supplies and an increase to expenses

Explanation:

When the supplies are bought they should be recorded as following:

  • Dr Supplies account
  • Cr Cash account (or Accounts Payable account)

At the end of the month after the supplies are used, then the records should be:

  • Dr Operating Expenses account
  • Cr Supplies account

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