Question

multiple select question
select all that apply
which of the following statements are accurate regarding supplies? (check all that apply.)

• supplies are assets until they are used.
• unused supplies are treated as expenses.
• supplies is considered a liability account.
• when supplies are purchased, they are added to the supplies account.
• unused supplies can be recorded as store supplies, office supplies or supplies.
• unused supplies are treated as assets.

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Explanation:

1. Supplies are assets (resources with future value) until consumed, at which point they become expenses.
2. Purchased supplies increase the asset account Supplies, rather than being expensed immediately.
3. Unused supplies are categorized by type (Store/Office/Supplies) as asset accounts based on their use case.
4. Unused supplies retain future economic value, so they are classified as assets on the balance sheet.

Incorrect options: Unused supplies are not expenses (they become expenses only when used), and supplies are asset accounts, not liability accounts.

Answer:

• Supplies are assets until they are used.
• When supplies are purchased, they are added to the Supplies account.
• Unused supplies can be recorded as Store Supplies, Office Supplies or Supplies.
• Unused supplies are treated as assets.