Supplies should be
Blank
______ and Supplies Expense should be
Blank
______ for supplies used during the period.

Question

Supplies should be 
Blank
______ and Supplies Expense should be 
Blank
______ for supplies used during the period.

BlackTom AI · Accepted Answer

Supplies are an asset on the balance sheet; when supplies are consumed, the asset account decreases and an expense is recognized (Supplies Expense) to match the cost with the period in which they were used.

1. Relevant knowledge points and concepts
- Classification: Supplies are a current asset until consumed.
- Accrual accounting and the matching principle: Expenses must be recorded in the period when the related benefit is used.
- Adjusting entry: To reflect usage, credit the Supplies asset and debit Supplies Expense.

2. Step-by-step reasoning process
- Start with the supplies asset account showing what was purchased but not yet used.
- At period end determine how much of that asset was used.
- Record an adjusting journal entry that transfers the cost of used supplies from the asset account to an expense account.

3. Intermediate steps / journal entry (showing all parts)
- Suppose Supplies asset had a beginning balance and you determine $X was used.
- Adjusting entry: Debit Supplies Expense $X (increases expense); Credit Supplies $X (decreases asset).
- Effect: Supplies (asset) decreases by $X; Supplies Expense increases by $X.

4. Why the correct answer is correct
- The adjusting entry reduces the asset balance because those supplies are no longer available; simultaneously, the expense increases to reflect consumption. Thus “Supplies should be decreased and Supplies Expense should be increased.”

5. Why the other options are incorrect
- “decreased; decreased”: Would reduce both asset and expense — incorrect because consuming supplies increases, not decreases, expenses.
- “increased; increased”: Would increase both asset and expense — inconsistent; consumption should not increase the asset.
- “increased; decreased”: Reverses the correct effects — asset should not increase when used and expense should not decrease.

6. Conclusion
The correct response is “decreased; increased,” which matches the provided answer.

Supplies should be Blank and Supplies Expense should be Blank for supplies used during the period.Single choice

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Supplies should be Blank ______ and Supplies Expense should be Blank ______ for supplies used during the period.Single choice