State BPA Fundamental Accounting Practice Exam

To adjust the supplies account, what would you debit?

1. Supplies inventory

2. Supplies expense

3. Accounts payable

4. Cash

The correct answer is: Supplies expense

To adjust the supplies account, the proper action is to debit Supplies Expense. This reflects the usage of supplies throughout the accounting period. When supplies are consumed, they are expensed rather than remaining classified as an asset. Debiting Supplies Expense increases this account to accurately represent the cost of supplies that have been used, thereby reducing the total net income on the income statement for that period. This entry captures the economic reality that supplies have been utilized, transitioning them from an asset on the balance sheet to an expense on the income statement. The other options do not align with the correct accounting treatment for adjusting the supplies account. Supplies Inventory would typically be credited when supplies are consumed, not debited. Accounts Payable and Cash are related to different transactions—not directly involved in the adjustment of supplies used and do not reflect the flow of costs related to supplies within the period being reported.