A physical count of supplies on hand at the end of May for Masters, Inc. indicated $1242 of supplies on hand. The general ledger balance before any adjustment is $2020. What is the adjusting entry for office supplies that should be recorded on May 31?
A. Debit Supplies $1242 and credit Cash $1242.
B. Debit Supplies Expense $2020 and credit Supplies $2020.
C. Debit Prepaid Supplies $778 and credit Supplies Expense $778.
D. Debit Supplies Expense $778 and credit Supplies $778.
E. Debit Supplies Expense $1242 and credit Supplies $1242.
Answer: D
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