Use This Information to Answer the Following Question If on December 31,2010,supplies on Hand Were $20,the Adjusting Entry

question 145

Multiple Choice

Use this information to answer the following question.
The trial balance for Tsung Corporation appears as follows:
$\begin{array}{c}\text {Tsung Corporation}\\\text {Trial Balance}\\\text {December 31, 2010}\\\begin{array}{|l|r|r|}\hline \text { Cash } & \$ 200 \\\text { Accounts Receivable } & 500 \\\text { Prepaid Insurance } & 50 \\\text { Supplies } & 150 \\\text { Office Equipment } & 400\\\text { Accumulated Depreciation-Office Equipment } & & \$ 200 \\\text { Accounts Payable } & & 300 \\\text { Common Stock } & & 600 \\\text { Service Revenue Earned } &&500 \\\text { Salaries Expense } & 100 \\\text { Rent Expense } &200 \\& \$ 1.600 & \$ 1.600\\\hline\end{array}\end{array}$
If on December 31,2010,supplies on hand were $20,the adjusting entry would contain a

• A) credit to Supplies for $20.
• B) credit to Supplies Expense for $130.
• C) debit to Supplies Expense for $130.
• D) debit to Supplies for $20.

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Definitions:

Supply

The total amount of a product or service that is available for purchase at any given price.

Labor Union

A collective organization of employees who bargain as a unit with employers.

Autoworkers

Employees in the automotive industry who are involved in the design, development, manufacturing, marketing, and selling of motor vehicles.

Automobiles

Motor vehicles with four wheels designed primarily for passenger transportation on roads.