QUESTION 12 During a company's first year, the asset account, Office Supplies, was debited for $2,300 for the purchases of supplies. At year end, office supplies on hand were counted and determined to be $825. The proper adjusting entry for supplies will a. decrease assets by $825 b.increase liabilities by $1,475 c. have no effect on net income d.increase expenses by $1,475 QUESTION 13 Explain how the following journal entry affects the accounting equation: $800 Supplies Accounts Payable $800 a. Both assets and liabilities increase. b. Both assets and equity increase. c. Both liabilities and equity decrease. d. Both assets and liabilities decrease