The Town Laundry Ltd $\$ 3,000$ ; Credit Supplies $\$ 3,000$

question 49

Multiple Choice

The Town Laundry Ltd. purchased $5,500 worth of laundry supplies on June 2 and recorded the purchase as an asset in the Supplies account. On June 30, a count of the laundry supplies indicated only $3,000 on hand. The adjusting entry that should be made by the company on June 30 is

• A) debit Supplies Expense, \( \$ 3,000 \); credit Supplies, \( \$ 3,000 \).
• B) debit Supplies Expense, \( \$ 2,500 \); credit Supplies, \( \$ 2,500 \).
• C) debit Supplies, \( \$ 2,500 \); cre dit Supplies Expense, \( \$ 2,500 \).
• D) debit Supplies, \( \$ 3,000 \); credit Supplies Expense, \( \$ 3,000 \).

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Definitions:

Voucher System

A method of accounting in which a record is kept for each transaction, detailing the necessary approvals and documentation.

Source Documents

Original records that provide evidence of financial transactions, such as receipts, invoices, or bank statements.

Invoice

A document detailing a transaction between a buyer and seller, including the quantities, prices, terms, and conditions of sale.