During a company's first year, the asset account, Office Supplies, was debited for exist2, 300 for purchases of supplies. At year-end, office supplies on hand were counted and determined to be exist825. The proper adjusting entry crediting supplies and debiting supplies expense will increase expenses and decrease assets by exist1, 475. decrease assets and increase expenses by exist825. increase expenses and increase assets by exist1, 475. have no effect on net income or the accounting equation