Exam IIA-CIA-Part3 topic 2 question 24 discussion

Actual exam question from IIA's IIA-CIA-Part3

Question #: 24
Topic #: 2

An organization's account for office supplies on hand had a balance of $9,000 at the end of year one. During year two, the organization recorded an expense of
$45,000 for purchasing office supplies. At the end of year two, a physical count determined that the organization has $11,500 in office supplies on hand. Based on this information, what would be recorded in the adjusting entry at the end of year two?

A. A debit to office supplies on hand for $2,500
B. A debit to office supplies on hand for $11,500
C. A debit to office supplies on hand for $20,500
D. A debit to office supplies on hand for $42,500

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Suggested Answer: A 🗳️

by luluka at March 4, 2021, 4:42 p.m.

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SiweBalala

5 months, 4 weeks ago

Selected Answer: A

Determine the amount of supplies available during the year = $9000+%45000= $54000 Amount on hand $11500 Determine the usage during the year= $54000-$11500= $42500 In order to determine the adjusting entry, we subtract what was used during the year from what was purchased by determining what was not used= $45000-$42500= $2500

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