The Following Adjusting Journal Entry Does Not Include an Explanation

question 204

Multiple Choice

The following adjusting journal entry does not include an explanation. Select the best explanation for the entry. $$\begin{array} { | c | l | l | } \hline \text { Supplies Expense } & 730 & \\\hline \text { Supplies } & & 730 \\\hline ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? & & \\\hline & & \\\hline\end{array}$$

• A) Adjust supplies inventory to actual.
• B) Record purchase of supplies.
• C) Reduce supplies expense.
• D) Record sale of supplies.

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Definitions:

Average Tax Rate

The percentage of total taxable income that is paid in taxes, calculated by dividing the total tax paid by the total taxable income.

Taxable Income

The portion of income that is subject to taxation after allowances, deductions, and exemptions.

Progressive Taxes

A tax system in which the tax rate increases as the taxable amount increases, meaning higher income individuals pay a higher percentage of their income in taxes.

State and Local Taxes

Taxes imposed by state and local government entities that can include income, sales, and property taxes.