A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1,250 of supplies on hand. The general ledger balance before any adjustment is $2,100. What is the adjusting entry for office supplies that should be recorded on May 31?
A. Debit Supplies Expense $1,250 and credit Supplies $1,250.
B. Debit Supplies Expense $850 and credit Supplies $850.
C. Debit Prepaid Supplies $850 and credit Supplies Expense $850.
D. Debit Supplies Expense $1,250 and credit Supplies $2,100.
E. Debit Supplies $1,250 and credit Cash $1,250.
Answer: B
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