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This question was created from EMBA 7010 Mid Term Rev. 4-2018.docx https://www.coursehero.com/file/36765025/EMBA-7010-Mid-Term-Rev-4-2018docx/

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5. During its first three months of operations, Cari's Bakery, Inc. purchased supplies such as plates,
napkins, bags, and cutlery for $9,000 and recorded this as supplies inventory. Supplies on hand at the
end of the first quarter, amount to $5,600.
To prepare financial statement for the first quarter, the company must record which of the following
accounting adjustments?
A) Increase Supplies expense by $5,600 and decrease Supplies inventory by $5,600
B) Increase Supplies expense by $3,400 and decrease Supplies inventory by $3,400
C) Increase Supplies inventory by $5,600 and decrease Supplies expense by $5,600
D) Increase Supplies inventory by $3,400 and decrease Supplies expense by $3,400
E)
None of the above

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