Andrew Is a Barber Who Does His Own Accounting for His

question 211

Short Answer

Andrew is a barber who does his own accounting for his shop. When he buys supplies he routinely debits Supplies Expense. Andrew purchased $1700 of supplies in January and his inventory at the end of January shows $400 of supplies remaining. What adjusting entry should Andrew make on January 31? a. $\begin{array}{ll}\text { Supplies Expense } &400\\ \text { Supplies } &&400\\\end{array}$

b. $\begin{array}{ll}\text { Supplies Expense } &1,700\\ \text { Cash }&&1,700\end{array}$

c. $\begin{array}{ll} \text { Supplies } &400\\\text { Supplies Expense } &&400\\\end{array}$

d. $\begin{array}{ll}\text { Supplies Expense } &,1,300\\ \text { Supplies } &&1,300\\\end{array}$

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Definitions:

Net Domestic Product

Measures the total value of all goods and services produced within a country's borders in a specific period, after accounting for depreciation.

Depreciation

A reduction in the value of an asset over time, often due to wear and tear or obsolescence.

Investment

The act of allocating resources, usually money, into something to earn income or gain profits.

GDP Deflator

A scale for assessing the cost of all newly manufactured, domestic final goods and services in a country's economy.