Answer:
Supplies Expense $ 950 Dr.
Supplies Account $ 950 Cr
To record supplies used .
Explanation:
Supplies are assets until they are used. When they are used up their costs are reported as expenses. The cost of unused supplies are recorded in a supplies asset account.
The entry above shows that supplies of $ 950 have been used up during the accounting period from the amount of $ 1385 leaving supplies of $ 435.
Not making an adjustment entry on 31 Dec would underestimate expenses and overstate net income.
