10 Questions
What is the primary objective of accrual accounting?
To match revenues and expenses to the correct accounting period
What is the term for the action taken by the senior accountant at the end of the fiscal period?
Adjusting the accounts
What would be the normal debit account when office supplies are purchased?
Supplies
Why are adjusting entries necessary at the end of the fiscal period?
To match revenues and expenses to the correct accounting period
What type of account is Supplies in the context of Markell Company?
Asset
What would be the result of not making adjusting entries for supplies used during the year?
The Supplies account would be overstated
What is the purpose of adjusting entries for supplies?
To allocate supplies expense to the correct accounting period
What is the balance of the Supplies account at the end of the year, according to Markell Company's records?
$15,000
Why are daily entries not made to record the usage of office supplies?
To avoid making frequent journal entries
What is the purpose of the adjusting entry for supplies?
To decrease the Supplies account and increase Supplies Expense
Learn how to accurately account for supplies in financial statements by taking inventory and adjusting entries. Understand the importance of adjusting supplies account to reflect the actual amount used during the year.
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