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The balance in Websavvy's supplies account on December 31 is $1,300. If the supplies used during the year were $450, what is the entry to adjust the supplies account at the end of the year? a. Debit supplies $450, credit supplies expense $450. b. Debit supplies expense $450, credit supplies $450. c. Debit supplies $850, credit supplies expense $850. d. Debit supplies expense $850, credit supplies $850. The balance in the Prepaid Insurance account for a one-year policy for Websavvy is $1,800. The balance was paid on May 1. What is the adjusting entry necessary at the end of the year, December 31? a. Debit prepaid insurance $600, credit insurance expense $600. b. Debit insurance expense $600, credit prepaid insurance $600. c. Debit prepaid insurance $1,200, credit insurance expense $1,200. d. Debit insurance expense $1,200, credit prepaid insurance $1,200.
1) The first thing to do is to classify each kind of account. Supplies is an asset, and an expense account is on the other side of the accounting equation. Therefor, as we know we must keep both sides in balance (equal). Recognizing that the asset side of the equation is expressed as debits and the Liabilities/Owner's equity side of the equation (which includes revenue and expense) is expressed as a credit value, we know that every transaction must have a debit and an equal credit. If you spend money on something, it comes out of the cash account (credit) and goes into the expense account (debit). Although we 'spent' supplies instead of money, the principle is the same. So: We used $450 worth of supplies - so this is our expense. We remove it from the Supplies account (credit) since we no longer have those supplies, and we put it into the expense account (debit). The answer for question 1 is b. Debit supplies expense $450, credit supplies $450. 2) First, notice that 8 months out of 12 have passed. So, we have used 8/12 of the amount in the account (2/3). 2/3 of $1800 = $1200. Therefor, the amount must be $1200. Now; the Prepaid Insurance account is basically an accounts receivable (because you paid ahead for time that has not passed yet, so they still 'owe' that money back to you), which means that it is an asset account. So, just as in the previous question, we are dealing with an asset account (which under normal circumstances maintains a debit balance) and an expense account. Since we are removing this amount from the accounts receivable account, and thereby reducing it's balance, it must be expressed as a credit. This means that it is a credit to the Prepaid Insurance account and a debit to the expense account (just as in the previous question). The answer is: d. Debit insurance expense $1,200, credit prepaid insurance $1,200.
Supplies Debit Or Credit
For the best answers, search on this site journal entry to record $1,500 of revenue earned and received in cash by Rosewell Landscape Maintenance Company is: b. Debit Cash; Credit Fees Income This is a cash transaction, so Wyoming is definitely out. If cash is received, you debit cash, which has a normal debit balance. Revenue has a normal credit balance, so Fees income is a credit. Woodville Inc. performed services for clients in the amount of $2,600 on credit. If this transaction had been posted in error to the Cash account instead of the Accounts Receivable account, what correcting entry would be necessary? a.Debit Accounts Receivable $2,600; credit Cash $2,600 If you debited Cash account in error, to correct the error, you just credit cash account now. So where is your debit? Wyoming because that's what you'd have debited in the first place if you hadn't made the error.
Give you a hint and that is all I am going to do: Accounting is a skill that either you get it or you don't: That is why America is in so much trouble now: Because nobody can count anymore, but they can steal. At the rate you are going, you will probably end up stealing: You are off to a good start when you want someone else to do your homework DEAD: Debit Increases Expenses, Assets, Dividends Prepaid Insurance is an asset Now you know the rest of the story
C - Company owes money = accounts payable D - Why debit salaries? You received cash. G - Giving a customer an invoice = Accounts Receivable H - Cash - Wyoming (Received cash and it was sitting in AR) A couple others look odd, but I haven't been in an acccounting class for many many years.....
1. "b" 2. "d"
First question is: a Second questions is: d