Tuesday, August 16, 2011
What's the adjusting entry for office supplies that are expensed upon purchase?
The problem states that the office supplies are expensed upon purchase (and there are $1,500 on hand). There is also a $5,000 balance in the office expense account. I'm used to debiting office expense and crediting office supplies, but that is when the original purchase entry is debit to office supplies and credit to either cash/accounts payable. Now, if the original entry is debit to office expense and credit to cash/accounts payable, would the credit in the adjusting entry needs to be the office expense? Thanks for any help!
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