Purrfect Pets had $6,000 of supplies at the end of October. During November, the company bought $2,000 of supplies. At the end of November, the company had $1,000 of supplies remaining. Which of the following statements is not true? a. During November, the company used $7,000 of supplies. b. Supplies should be reported at $1,000 on the balance sheet. c. An expense should be debited for $7,000 in November. d. An asset should be debited for $1,000 in November.

Question

Business

Adam Lowe

20 March, 23:06

Purrfect Pets had $6,000 of supplies at the end of October. During November, the company bought $2,000 of supplies. At the end of November, the company had $1,000 of supplies remaining. Which of the following statements is not true? a. During November, the company used $7,000 of supplies. b. Supplies should be reported at $1,000 on the balance sheet. c. An expense should be debited for $7,000 in November. d. An asset should be debited for $1,000 in November.

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Answers (1)

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Anabella Preston · Answer 1

d. An asset should be debited for $1,000 in November

Explanation:

The movement (change) between the opening and ending balance of the supplies account is dependent on two factors; level of purchases and quantity used. The equation showing the relationship is

Opening balance + purchases - quantity used = ending balance

6000 + 2000 - quantity used = 1000 (all amounts in $)

Quantity used = $7000

Considering the options

a. During November, the company used $7,000 of supplies - True

b. Supplies should be reported at $1,000 on the balance sheet - True

. c. An expense should be debited for $7,000 in November. - True

d. An asset should be debited for $1,000 in November - False

Asset would have been debited with the purchase for $2,000