The Policy at Adler Corporation Is to Expense All Office

question 152

Multiple Choice

The policy at Adler Corporation is to expense all office supplies at the time of purchase.On the last day of the accounting period, there are $1,100 of unused office supplies on hand and the balance of supplies expense is $3,500.What should the accountant do?

• A)Debit Supplies and credit Supplies Expense for $1,100.
• B)Nothing, company policy says to expense supplies when purchased.
• C)Convince management to change its policy to avoid problems in the future.
• D)Debit Supplies Expense for $2,400 and credit Supplies for $2,400.

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Definitions:

Profit Sharing

A company policy of distributing a portion of its net profits to its employees.

Pension Plans

Financial arrangements that provide individuals with income upon retirement, often as part of their employment benefits, including defined benefit and defined contribution plans.

Agriculture Industry

The sector of the economy that specializes in the production, processing, and distribution of food, fiber, and products derived from plants and animals.