Adjusting Entries are required at the end of the period to ensure that accrual a

Question

Adjusting Entries are required at the end of the period to ensure that accrual accounting principles are applied. At the beginning of the month, $1,350 of office supplies were purchased. There was not a beginning balance and the one purchase was the only one for the month. At the end of the month, $500 of supplies remained. Develop the adjusting entry. (1) Name the accounts impacted and how using the format account name/debit or credit/dollar amount (10 points), and (2) explain how the Accounting Equation is impacted.

Explanation / Answer

Journal Entries Particulars Dr Amt Cr Amt Supplies Expense Dr                             850.00 To Supplies                                                                        850.00 Supplies used = 1350- 500 = 850 Account Name Debit/Credit Dollar amt Supplies Expense Dr                                                                        850.00 Suplies Cr                                                                        850.00 Assets = Liabilities   +   Equity Assets(Supplies ) would decrease by 850 Equity (Income ) would decrease by 850

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