A Company Started the Year with $400 of Supplies

question 26

Multiple Choice

A company started the year with $400 of supplies. During the year the company purchased additional supplies costing $1,600. There were $800 of supplies on hand at the end of the year. An adjusted trial balance prepared at the end of the accounting period will show the following balance in Supplies:

• A)$1,400.
• B)$800.
• C)$600.
• D)$0.

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Definitions:

Open Market

A scenario where economic transactions are conducted in a free manner without restrictions, allowing for the buying and selling of goods and services.

Government Bonds

Debt securities issued by a government to finance its expenditures, considered low-risk investments.

Interest Rates

The cost of borrowing money or the return on invested funds, typically expressed as a percentage of the principal.

Investment Spending

Expenditure on physical assets like machinery, buildings, or equipment, intended to create future benefits.