During a company's first year, the asset account, Office Supplies, was debited for $4, 100 for the purchases of supplies. At year-end, office supplies on hand were counted and determined to be $1, 725. The proper adjusting entry crediting supplies and debiting supplies expense will increase expenses and decrease assets by $2, 375. increase expenses and increase assets by $2, 375. have no effect on net income or the accounting equation. decrease assets and increase expenses by $1, 725