During Bruce Company's First Year of Operations, the Company Purchased

question 57

Multiple Choice

During Bruce Company's first year of operations, the company purchased $2,600 of supplies. At year-end, a physical count of the supplies on hand revealed that $975 of unused supplies were available for future use. How will the related adjusting entry affect the company's financial statements?

• A)Expenses will increase and assets will decrease by $1,625.
• B)Assets and expenses will both increase by $975.
• C)Expenses and assetswill both increase by $1,625.
• D)The related adjusting entry has no effect on net income or the accounting equation.

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Definitions:

Promissory Note

A written, unconditional promise by one party to pay a certain sum of money to another party at a specified date or on demand.

Amount Due

The total sum of money owed to a creditor by a debtor at a specific date.

Credit Card Expense

The fees and interest costs associated with the use of credit cards by individuals or businesses.

Credit Sales

Sales transactions where the payment is deferred, allowing the buyer to purchase goods or services on account.