A Physical Count of Supplies on Hand at the End

question 20

Multiple Choice

A physical count of supplies on hand at the end of May for Masters,Inc.indicated $1,250 of supplies on hand.The general ledger balance before any adjustment is $2,100.What is the adjusting entry for office supplies that should be recorded on May 31?

• A)Debit Supplies Expense $1,250 and credit Supplies $1,250.
• B)Debit Prepaid Supplies $850 and credit Supplies Expense $850.
• C)Debit Supplies Expense $1,250 and credit Supplies $2,100.
• D)Debit Supplies $1,250 and credit Cash $1,250.
• E)Debit Supplies Expense $850 and credit Supplies $850.

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Definitions:

Value-Based Pricing

A pricing strategy where the price of a product or service is determined based on the perceived value to the customer rather than the cost of production.

Required Return

The minimum expected return by investors for investing in a particular security or project, reflecting the risk level.

Investment

The allocation of resources, such as capital, time, or assets, with the expectation of receiving future benefits or returns.

Useful Life

The estimated duration of time an asset is expected to be useful for the business before it becomes obsolete or too costly to maintain.