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Q 3-6
The preliminary balance after the $260 debit will be of $1085 but the real balance at the end of
January is $630. This means that a credit for $455 to the account should be made in order to
reflect the real amount of supplies on hand (
http://www.accountingcoach.com/online-accounting-
course/08Xpg02.html
).
.
Failure to do so would provide a wrong picture of the company’s asset Supply account on the
balance sheet for the first month of the accounting year. The income statement for the period
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Unformatted text preview: should be adjusted to reflect the expenses incurred to debit the supply account in order to keep a proper balance. References: Easton, P., Halsey, R., McAnally, M., Hartgraves, A. & Morse, W. (2010). Financial & Managerial Accounting for MBAs . Canada: Cambridge Business Publishers. http://www.accountingcoach.com/online-accounting-course/08Xpg02.html...
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- Spring '09
- N/A
- Balance Sheet, Income Statement, Double-entry bookkeeping system, Cambridge Business Publishers, supply account
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