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Adjusting Entries: Supplies definitions Flashcards

Adjusting Entries: Supplies definitions
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  • Supplies
    Items such as notepads and paper clips owned by a company and used in daily operations, recorded as assets until consumed.
  • Asset
    A resource owned by a business, providing future economic benefit, such as office supplies before they are used.
  • Adjusting Entry
    A journal entry made at period end to update account balances, ensuring they reflect actual usage or status.
  • Supplies Account
    A ledger account tracking the value of unused office items, reduced as supplies are consumed.
  • Supplies Expense
    An account reflecting the cost of supplies used during a period, calculated as the difference between beginning and ending supplies.
  • Physical Count
    An inventory process involving the actual counting of remaining supplies to determine period-end balances.
  • Debit
    An accounting entry that increases assets or expenses and decreases liabilities or equity, such as adding to supplies.
  • Credit
    An accounting entry that decreases assets or expenses and increases liabilities or equity, such as reducing cash.
  • Cash Basis Accounting
    A method where transactions are recorded when cash is exchanged, initially expensing supplies upon purchase.
  • Accrual Basis Accounting
    A method where transactions are recorded when incurred, matching supplies expense to actual usage.
  • Deferral
    A type of adjusting entry postponing recognition of an expense or revenue, as with supplies not yet used.
  • Prepaid Expense
    A payment made in advance for goods or services, recognized as an asset and expensed over time or usage.
  • Inventory
    A detailed list or count of items on hand, such as supplies, used to determine period-end balances.
  • Period-End
    The closing point of an accounting cycle when adjustments, such as for supplies, are made to reflect actual balances.
  • Journal Entry
    A formal accounting record of a transaction, such as purchasing or adjusting supplies, affecting multiple accounts.