10. Adjusting Entry: Supplies

in Chapter 3(Video 10 of 16)2 min

Playback rate is available in the player's settings.

An adjusting entry example using Supplies as the account of interest.

The Rest Of TheVideos

1Not completedCurrent Assets10 min
2Not completedNon-Current Assets11 min
3Not completedCurrent Liabilities7 min
4Not completedNon-Current Liabilites2 min
5Not completedThe Classified Balance Sheet5 min
6Not completedCash vs. Accrual Accounting8 min
7Not completedExpense Recognition9 min
8Not completedAccruals and Deferrals16 min
9Not completedWhat is an Adjusting Entry?5 min
10Not completedAdjusting Entry: Supplies
You are here.
2 min
11Not completedAdjusting Entry: Wages5 min
12Not completedAdjusting Entry: Unearned Revenue3 min
13Not completedAdjusting Entry: Interest3 min
14Not completedContra-accounts5 min
15Not completedDepreciation8 min
16Not completedThe Closing Process11 min

Chapter 3Practice Problems

Click Here to View All Problems at OnceView
1Not completedAdjusting Entry IdentificationEasy
2Not completedClosing Journal AccountsEasy
3Not completedCurrent AssetsEasy
4Not completedRevenue Journal EntryEasy
5Not completedRevenue RecognitionEasy
6Not completedRevenue RecognitionEasy
7Not completedAdjusting Entry - Salaries Payable Moderate
8Not completedAdjusting Entry - Wage ExpenseModerate
9Not completedClosing ProcessModerate
10Not completedDetermining Net Income From Journal EntriesModerate
11Not completedDetermining Net Income From TransactionsModerate
12Not completedPrepaid RentModerate
13Not completedRevenue RecognitionModerate
14Not completedAccount ClassificationsHard
15Not completedAdjusting Journal EntriesHard
16Not completedAdjusting Journal EntriesHard
17Not completedRevenue and Expense RecognitionHard
18Not completedThe Effect of TransactionsHard
19Not completedWhen You Forget to do Adjusting EntriesHard
20Not completedYear End Closing & Account ClassificationHard
← Chapter 2

Read Along With the VideoTranscript

We're doing another example of adjusting entries, and this time it's gonna be supplies. So let's take a look at supplies and see how that's gonna show up on your test or your quizzes or whatever. On May 1, we purchased $1,000 of supplies. Supplies on hand May 31 were $200. So we're looking for the journal entry for May 31, the adjusting entry. So you see in this one, it doesn't tell us how much we used. I mean, you can figure it out, but it just says how much we have left over. So let's look at a T-account for supplies.

Now, I understand this one's very simple, but you're gonna have ones that aren't so simple. So supplies is an asset. We know that on May 1, we put $1,000 in, and we know that on May 31, we had $200 left over. So that leaves us with an $800 decrease in supplies, right? $1,000 minus $800 is $200. So this is the entry that we need to make. We need to get this $800 on the books. So I always like to start with the original just so I know what I'm dealing with. So May 1, $1,000 into the supplies account.

And just assume we paid for them with cash. So that's our original entry. Then on May 31, $800 of these supplies here have been used up. So that means we have turned what was an asset into an expense. So we're going to call it supplies expense of $800, and we're gonna decrease the supplies account by $800. So we've done a credit to supplies of $800, which matches with this blank that we filled in over here.