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6. The unadjusted account balance show Supplies $1,350 and Supplies Expense $0. If $600 of supplies are on hand at the end of the period, the adjustment: A. Increases Supplies $600 and increases Supplies Expense $600 B. Increases Supplies $750 and increases Supplies Expense $750 C. Increases Supplies Expense $750 and decreases Supplies $750 D. Increases Supplies Expense $600 and decreases Supplies $600

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Answer:

C. Increases Supplies Expense $750 and decreases Supplies $750

Explanation:

We assume that the balance on Supplies account of $1,350 should have been $600 and Supplies Expense with balance $0 should have been $750.

The corrective entry for this error will be to reduce the supplies account by $750 and increase the supply expense account by $750.

Therefore the following entry is required.

Supply Expense debit $750   (Increase )

Supplies credit $750 (Decrease)

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