A company had no supplies available at the beginning of August.A company purchased $6,000 worth of supplies in August and recorded the purchase in the Supplies account.On August 31,the fiscal year-end,the physical count of supplies indicates the cost of unused supplies is $3,200.The adjusting entry would include a $2,800 debit to Supplies.

Supplies Account

An account used to track the cost of consumable items used by a company during its operations, which are not part of the final product.

Adjusting Entry

An accounting record made at the end of an accounting period to allocate income and expenditure to the correct period.

Physical Count

Physical count refers to the actual counting of inventory items in a warehouse or store to verify stock levels.