Supplies Debit or Credit is the accounting term used to describe the transaction resulting from spending money on items that will be used and consumed in the production of goods or services. When supplies are purchased, the asset account “Supplies” is debited and the company’s bank account receives a credit entry. This debit/credit transaction represents the amount spent on items such as materials, equipment, or other assets used in day-to-day business operations. Over time, these supplies will be used, and this depletes the inventory value stored in the company’s assets. The impact on the company’s financial statement is that the net worth decreases by the same amount as supplies have been depleted.