At the beginning of the year, supplies of $4,800 were on hand. During the year, the business paid $10,800 for more supplies. At the end of the year, the count of supplies indicates supplies of $3,400 on hand.
Required
1. Assume that the business records supplies by initially debiting an asset account. Therefore, place the beginning balance in the Supplies T-account and record the above entries directly in the accounts without using a journal.
2. Assume that the business records supplies by initially debiting an expense account. Therefore, place the beginning balance in the Supplies Expense T-account and record the above entries directly in the accounts without using a journal.
3. Compare the ending account balances under both approaches. Are they the same? Explain.