What adjusting entry is made to account for the use of supplies?

The appropriate adjusting entry to account for the use of supplies involves recognizing that the supplies have been consumed during the accounting period. This is reflected by debiting Supplies Expense. This entry captures the cost associated with the supplies that are no longer available for future use because they have been used in operations.

On the other hand, crediting Supplies reflects a decrease in the Supplies asset account, indicating that the physical quantity of supplies on hand has diminished. By making this adjusting entry, the financial statements accurately convey the expenses incurred and the remaining supplies available at the end of the period. Thus, both the expense and asset accounts are updated to reflect the true financial position of the entity. This practice aligns with the matching principle, ensuring that expenses are recognized in the period in which they are incurred.