3) Buying supplies also results in a deferral. When SuperDels got supplies, it recorded them in the Supplies account.
Supplies is an asset account used to keep track of supplies (i.e., pencils, paper). The Supplies account is increased when new supplies are acquired and decreased when supplies are used / expensed (usually in a single adjusting entry at period end).
This is an asset exchange transaction:
Illustration 13: Effect of purchase of supplies
|
Assets |
... |
Assets |
|
Cash |
... |
Supplies |
Beginning Balances |
$3,900 |
|
$ 0 |
3) Purchase of Supplies |
(500) |
|
+500 |
Ending Balances |
3,400 |
|
500 |
