BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -If the balance of the prepaid supplies account on January 1 was ₱500, supplies purchased during the year were ₱1, 750 (initially recorded as asset), and the supplies on hand at December 31 (per physical count) were ₱300, the amount for the appropriate adjusting entry at December 31 is. ₱200.

Detailed explanation-2: -credit; debit. The adjusting entry for supplies used during the period requires a(n) credit to Supplies and a(n) debit to Supplies expense.

Detailed explanation-3: -Adjusting journal entries are recorded in a company’s general ledger at the end of an accounting period to abide by the matching and revenue recognition principles.

Detailed explanation-4: -If prepaid costs are initially recorded as an asset, no adjusting entries will be required in the future. The cost of a depreciable asset less accumulated depreciation reflects the book value of the asset. Accrued revenues are revenues that have been earned and received before financial statements have been prepared.

Detailed explanation-5: -Adjustments for prepaid expenses As you use the prepaid item, decrease your Prepaid Expense account and increase your actual Expense account. To do this, debit your Expense account and credit your Prepaid Expense account. This creates a prepaid expense adjusting entry.