Final answer:
The correct answer to how supplies and supplies expense should be treated for supplies used up during the period is: Supplies should be decreased and Supplies Expense should be increased.
Step-by-step explanation:
The question relates to the accounting treatment for supplies and supplies expense at the end of an accounting period. When supplies are used up during the period, the balance in the Supplies account should be decreased, as the available supplies are being consumed. On the other hand, the balance in Supplies Expense, which represents the cost of supplies used during the period, should be increased. This reflects the expense recognition principle, which states that expenses should be recorded in the period in which they're incurred.
So, the correct answer to the student's question is: Supplies should be decreased and Supplies Expense should be increased for supplies used up during the period, which corresponds to answer option C. decreased; increased.