Accounting Adjusting Entries Help (serious)

[Spartan32]

The problem gave me a trial balance and a bunch of adjusting entries to do for it. I have done them all except 2.

- Advertising paid in advance $700

On the trial balance, the only advertising account is Advertising Expense which has a balance of $6,700


- Office supplies on hand $1,500, charged to office expense when purchased

On the trial balance, the only office supplies account is Office Expense with a balance of $5,000

I dont get this. Why would they charge the office supplies to office expense when purchased, rather than just office supplies...

[Spartan32]

bump

[Riceboi]

The problem gave me a trial balance and a bunch of adjusting entries to do for it. I have done them all except 2.

- Advertising paid in advance $700

On the trial balance, the only advertising account is Advertising Expense which has a balance of $6,700


- Office supplies on hand $1,500, charged to office expense when purchased

On the trial balance, the only office supplies account is Office Expense with a balance of $5,000

I dont get this. Why would they charge the office supplies to office expense when purchased, rather than just office supplies...

I think office supplies is just an inventory account like how much worth of office supplies you have, office supplies expense is what you use when you buy them.

[Habibe2003]

The problem gave me a trial balance and a bunch of adjusting entries to do for it. I have done them all except 2.

- Advertising paid in advance $700

On the trial balance, the only advertising account is Advertising Expense which has a balance of $6,700


- Office supplies on hand $1,500, charged to office expense when purchased

On the trial balance, the only office supplies account is Office Expense with a balance of $5,000

I dont get this. Why would they charge the office supplies to office expense when purchased, rather than just office supplies...

If the advertising relates to future periods (paid in advance) it should not be expensed throught the P&L in the current period. You should debit/credit only balance sheet accounts.

Paid in advance xx (debit)
Cash (or bank) xx (credit)

When purchasing office supplies you could record the following:

Office supplies xx (debit)
Cash & banks xx (credit)

As you use the supplies you make the following journal entry

Office supply expense xx (debit)
Office supplies xx (credit)

In practive however, if it is only $1,500 you could expense it immediately.

[johnston.277]

- Advertising paid in advance $700

On the trial balance, the only advertising account is Advertising Expense which has a balance of $6,700

My guess here is reduce the expense by the $700 and record an entry to prepaid assets or other assets. The offset may also be cash depending on what the entry is. I feel like I am missing so detail.

Dr Prepaid Assets or Other Assets $700
Cr Advertising Expense $700

-or-

Dr Prepaid Assets $700
Cr Cash $700

- Office supplies on hand $1,500, charged to office expense when purchased

Reduce office expense by $1,500 and record an entry to other assets again

Dr Prepaid Asset $1,500
Cr Office Expense $1,500

[addiction543]

[QUOTE=Spartan32;334868561]The problem gave me a trial balance and a bunch of adjusting entries to do for it. I have done them all except 2.

- Advertising paid in advance $700

On the trial balance, the only advertising account is Advertising Expense which has a balance of $6,700



For this you want to
debit Prepaid Advertising for 700
Credit Advertising Expense for 700




for the second entry
Debit Office Supplies for 1,500
Crdit Office Supplies Expense for 1,500