During a Company's First Year of Operations,the Asset Account,Office Supplies,was

question 96

Multiple Choice

During a company's first year of operations,the asset account,Office Supplies,was debited for $2,300 for the purchases of supplies.At year-end,a physical count of the supplies on hand revealed that $825 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 $1,475.
• B)Assets and expenses will both increase by $825.
• C)Expenses and assets will both increase by $1,475.
• D)The related adjusting entry has no effect on net income or the accounting equation.

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